Linden Lab Reports Q1 2011 Most Successful in Company History (After 30% Layoffs Last Summer)

Last Friday, Linden Lab COO and CFO Bob Komin (known as BK Linden in Second Life) announced that the first quarter of 2011 was "the most successful in Linden Lab’s history." Specifically, "Efforts to improve operating focus and cost structure have resulted in two consecutive quarters of strong cash flow and profitability", he wrote.

This is good news for the health of Second Life, at least in the short term. However, it's worth remembering one of the main items in the "cost structure" improvements: Linden Lab laying off 30% of its employees last June. With roughly 100 staff members gone since June 2010, the company's probably cut upwards of $8 million in operating costs. At the same time, there's no reason to believe total revenue has been increasing since then. Indeed, while virtual land is still overwhelmingly the company's main revenue source, since the last quarter of 2010, Second Life's total land mass has somewhat decreased, with a reported 74 private islands lost last week.

None of this is to criticize the Linden layoffs, as painful as they surely were to the staff; they're often a harsh necessity for survival. However, for Linden Lab to have an unambiguously successful quarter, I think we need to see an increase in user growth and growth in new revenue streams that are strong enough to replace any losses in virtual land revenue. With new registrations increasing, hopefully we'll see both soon.

Comments

[Geo Meek]

Can only hope the platform keeps growing....

[Arcadia Codesmith]

NatGeo channel just ran (reran?) a segment of its series "Taboo" featuring Stroker Serpentine.

It might provide a modest statistical bump to the horndog segment of the market.

The piece wasn't horribly inaccurate, but it was narrowly focused on Stroker's world, which is a bit like looking at New York from the display window of a fetish boutique.

Not that there's anything wrong with that :)

On a bright note, the cross-dressing Japanese cosplayers from the preceeding segment were REALLY cute!