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Monday, May 05, 2008


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Simone Brunozzi

Hi Wagner,
my extimate says 40 M$ per year; I explained everything here:

Let me know what you think about it.


Philip Rosedale just claimed in an interview with The Guardian (UK paper) that SL currently runs on 18,000 cpu's - i think they're mostly 4 cpu's per server? So you're maybe slightly short - it would be 4500, but certainly close enough to make the point.

The full interview (complete with yawns!): http://www.guardian.co.uk/technology/audio/2008/may/04/philip.rosedale

Prospero Linden

I don't think this is a secret -- and, if it is, can I have a job -- but the number 4500 running servers is pretty close to reality at the moment, but 5000 is even closer to reality. We do have some spare machines out there, as we're selling land all the time, and want to have some spare capacity to handle it.

Don't ask me to confirm or deny profit or loss numbers though, because (a) I know better than to say, and (b) I don't even know the numbers... I'm too busy keeping track of servers.

CyFishy Traveler

I think you may be running a little high on the Premium membership income, though, since not everybody does the month-to-month $10 rate. You might want to round down to account for folks who pay quarterly ($7.50 a month) or yearly ($6.00 a month.)


And don't forget the weekly stipend to premium members! I suspect this is a typical scenario: user pays an annual membership of $6/mo (as CyFishy points out above), and receives a stipend of L$300/week. If we assume the L$300/week is approximately USD$1.12, then the real cost of premium memberships is USD$72 minus USD$58.65 = USD$13.35, or a mere USD$1.11 per month! So, the 92,000 premies could be generating as little as USD$102,000 per month, far less than the USD$2M above. Of course, this depends on how many people pay annually or quarterly. Let's just say that the premie income is going to be less than the USD$2M.

Great analysis, Hamlet!

Tateru Nino

Way too high on the staff. Some staff earn as little as about $12,000, based on what we've been told by Linden Lab.

As far as we know, the lab pays well below market.


Interesting article; thank you. One suggested amendment - in the UK, Linden are based in Brighton, not Dover. Brighton is hip and expensive; Dover is the opposite.

Hamlet Au

Ack, thanks, fixed!

Erasmus Hartunian

I get paid to be a paying member! (US$72 per year - old stipend of L$500 a week = profit) in addition, the referral L$ I receive are greater than the stipend and I am sure I am just small fry referral. So, total commissions paid to members has to amount to a few millions per year.
Average employee cost is probably about right at $100K per year considering social costs (they do offer a decent health plan, right?).
All told, I would agree with the $40-50M ballpark figure.
... Thinking about referrals: With the new trademark rules in effect, that could drop significantly in the future ... along with the associated income.

Wordfromthe Wise

I think you have to add some US$ for all those texture uploads (which are each 10Lindens).. But i cant estimate a number for that. Anybody wants to throw in a number ?



Hi Wagner.

I think that you, but also Simone, forget the monthly expenses from "Unique Users with Positive Monthly Linden™ Dollar Flow (PMLF)".
Simply, consider, the users with PMLF > USD 5000 that are 156,155,165 in 2008Q1.
Therefore, at minimum limits...

5000 US$ x 150 users = 750.000 USD.

Is impossible to know how of this is reinvested in the internal economy,
but if is only 1/3, this means that you must consider ad additional US$ 500.000 monthly cost for LindenLab. In this rough approximation, US$ 6 million in one year....


Dep1050 Plasma

Nexus Burbclave

That is an interesting back of the envelope calculation. I don't have a better estimate, but this does give me pause regarding the IPO rumors. Wall Street is notoriously short-sighted. If your numbers are indeed in the ballpark, the street will want to see triple that number by year two or the stock would likely free-fall. If LL wants to give the company and the platform the long term focus that is needed for an emerging technology and an emerging company, I believe they would do well to stay private for a while.


I have to agree with Tateru's statement - you should probably cut the staffing figure by at least a third, from what I've heard (if this has changed, they should be blasting that on the employment page front and center - but the fact that positions posted well over a year ago have not been filled ring much louder).

Erasmus - If I realized that was the case (even at a paltry $24 profit) I would not have dropped my account to Basic. Note that figure of L$500/week only applies to older members (as of Nov-06 it dropped to L$300, which comes out to US$59 in L$ for the year).

Before anyone considers upgrading old accounts, they count the time you last upgraded (so today I would get L$300 instead of L$500 - which isn't worth it).


Patch Lamington

Giving out stipends doesn't cost Linden Lab anything. Residents with postive monthly linden $ flow doesnt cost the lab anything (it is other residents buying those Linden$ - and paying them to the PMLF winners).

But the income source missed are sales of newly minted L$. In April Supply Linden sold 159ML$... at market sale prices that is US$0.5 Million.

So another 6 million US$ income a year... ca-ching!!!



It's not that much. The lindens are seeking investors. If that's the case, they're not "banking" like you all think.

Bettina Tizzy

Just came across this. To the chatter regarding employee salaries, don't forget that it costs a company a good deal more per employee than the salary, though I have no idea what LL's benefits package looks like. We can assume health insurance, and possibly a 401K plan. The average in the U.S. oscillates between 30% to 40% over salary.

401k advisors

Bettina, are you sure about 30 to 40 percent? I always thought it hovered around 25 to 28 percent, but...I suppose my information might be a touch out of date, lol. Whats your source? I might have to go diggin...

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