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LINDEN RESEARCH, INC. TO BE ACQUIRED


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21 minutes ago, anuk2939mk2 said:

yes. I hope Second Life would have Marketing in Malaysia and Thailand in southeast Asia! due to having more investors! and i suggest Linden Lab to create the office in Bangkok Thailand. That's very great move! Linden Research!

I  could definitely see phone support being offshored. Waterfield owns several call center companies.

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Good day, all! Just jumping in to respond to a few of the comments... A few folks are speculating that this is the end of SL and nothing could be further from the truth. Any talk of dismantl

SECOND LIFE IS DEAD

Honestly, as much as I love Linden Lab and Second Life, I see this as a horrible, horrible thing, and personally feel that the "This is good news!" from LL is PR to keep residents happy in the meantim

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5 hours ago, Qie Niangao said:

I don't know how non-public companies work. Does the acquisition get the VCs out of the picture entirely? And sweep the board clean, finally? (If so, honestly, this is bound to be a win.)

One does kinda wonder how the deal got made. We know who bought, but who was doing the selling?

In any case, FFS, it's not as if Linden Lab is a non-profit. It makes money and the buyers want something that's pandemic-proof. I mean, looking at the current US coronavirus statistics, Linden Research Inc looks like a fine investment to me.

The chairman of the board is Jed Smith, and at least formally, wouldn't he be the seller?

 

https://www.lindenlab.com/about

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5 hours ago, Vic Mornington said:

I've worked for several companies that got taken over by investment companies.  What happens next falls into two categories depending on the path that the investment company follows.

1: Things run smoothly for a year or so, then the investment company starts asset stripping piece by piece.  Not all at once (usually) but small pieces of the pie are stripped out and moved on to other companies they own.  Before anyone knows it, whats left is an empty shell, the user base then collectively leaves, and that empty shell is closed, or then, ultimately sold off to another buyer.  While that is going on, and about halfway through their plan, prices start to creep up, or new ways to milk the customer for money is brought in.  They intend to get as much cash as they can while the asset stripping is going on to at least get some kind of return on the initial investment before the sell off starts.

2: The investment company...invests.  They take a loss on the initial purchase, a loss on the initial investment but have a road plan to regain that investment back in 2 to 5 years.  They hire in new staff to oversee and overhaul of the internal company structure, they hire in new I.T and new Dev's to oversee and undertake a complete and total independent and impartial inventory of the underlying structure of the company.  They then target the weak points, or points which may in the future stop or slow down income stream...and they throw money and people at it to fix the problem.  It is a long multistage plan, with the eventuality of the plan of making the company they invested into more profitable either by sheer growth of the user base, or an internal and external restructuring of the company and the services that company provides.  THIS is the kind of investment company we can hope has taken over Linden Research, the type of company who are in it for the long haul.

We will find out (probably by the beginning of next year) if the investment company who took over is path 1, or path 2. 

If they are path 1, we will all see it within 6 months as cash grabs as small asset stripping starts to take place.  When you see that start to happen...leave or dramatically scale back.  I know i will.

 @animats post on page 2 of this thread ("Waterfield acquisition philosophy, as addressed to companies wanting to be bought out: ") seems to align with what you say in category 2, rather than category 1.

Accquisitions are certainly not my field of knowledge, but of course the investors want to see growth in income. So going forward, my speculations are:

- they see the financial potential of SL due to the recent Covid situation which has grown for LL i.e. promoting SL to facilite online meetings and spaces for businesses. They will want to capitalise on this and drive it forward and perhaps expand into, or find other areas for similar growth.

- they aim to make SL more commercial to increase income - what that will mean for users I don't know. Price restructuring for existing premium/land etc. maybe Or finding other ways to monetise SL. Or introducing some new aspect we don't know about yet that could bring in a wider user base and make money.

I don't forsee the 'closure' of SL. I think it will probably tick along as it does now, but with added or sister offerings in some form or other. Maybe new subsidiaries companies to develop or push stuff for businesses or other markets.  Who knows:)

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10 minutes ago, Evangeline Arcadia said:

 @animats post on page 2 of this thread ("Waterfield acquisition philosophy, as addressed to companies wanting to be bought out: ") seems to align with what you say in category 2, rather than category 1.

Accquisitions are certainly not my field of knowledge, but of course the investors want to see growth in income. So going forward, my speculations are:

 

Another thing would probably grow Tilia (which is probably named for a tree) into a bigger services that could offer financial services for many other companies.

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Further to my previous post, I just read this on the Waterfield group site (where you can read the statement animat posted earlier):

"Our mission is to add value in the areas of financial services and financial technology."

https://www.waterfield.com/private-equity/

So speculation about the main interest being in Tilia might well be correct (if the investment group is Waterfield, not some other group)

 

Edited by Evangeline Arcadia
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After careful consideration, I have decided not to freak out just yet.

Yes, news like this is always unsettling. The History of Mergers and Acquisitions is a thick volume full of tragic tales -- and this could of course turn into one of them.

Yet, this feels a little different. Waterfield seems to favor long term ownership over hit-and-run leveraged buyouts. That could turn out not to be true, but what are the assets that that could potentially be stripped and sold? A bunch of "previously owned" servers in a colo somewhere. A ton of user created content, the vast majority of which is not usable outside Second Life. A fine selection of Linden Bears.

So why on earth would you buy Linden Research, Inc? I can see at least two reasons:

  • Tilia is a unique business with considerable potential. It's also much less valuable without Second Life as its flagship customer, which is good news for SL.
  • I've lost count of the number of times I've heard that "the future of work has changed" since the start of the pandemic. So I would not be very surprised to learn that LL is working on providing turnkey solutions for virtual office and meeting spaces for businesses. Mr. Altberg even alluded to this possibility during his talk at SL17B.

Only time will tell. Everything may still go to hell in a hand basket, but based on what little we know so far, this could have been a lot worse.

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21 minutes ago, MLALRS7044 said:

I hope nothing really BAD happens with this purchase yet. Remember M Linden? He was very bad to SL as a CEO. It's not the case to Ebbe, as he's a wonderful person. Plus we all, residents of SL, do not want another "M Linden" in the command of the Lab.

PS. By M Linden i'm referring to Mark Kingdon, CEO of LL from 2008 to 2010.

Does anyone Agree with me?

Odd comparing Mark Kingdon and Ebbe as to different sides of the coin. Whilst I would agree Ebbe is far better than Mark, at least Mark saw future for Second Life and actively tried to make it and not another program more appealing. Also, the reason I said it was odd you comparing the two is, because it is Ironic in the paths that they took were in essence identical and proven to take the same unfortunate end, yet one is hated and the other is not. Let me put it this way.

Under Mark Kingdon's tenure, he wanted to look at a world in which businesses can create independently hosted grids on users/business computers (aka basically Sansar except using SL as the platform). He called it Second Life Enterprise. It failed and led to many layoffs and the final nail in the SL hype train.

Ebbe did, in essence the same except, invested millions more into a separate program to do the same. A separate hostable world except made those worlds downloadable and not streamed. It lead to many layoffs as well as now this where Linden Lab is sold 'Acquired'.

You may say coincidence, I say Ironic.

The issue now is where can SL go from here? in 2010 SL still had a place where Virtual Worlds were all the rage and new ones popping up left right and centre. Now its a different story with near none being looked at. Any company investing in this world is only going to look at dollars and things it can use to make more- especially an investment group. Given Tillia is so linked to SL and it being unlikely Linden Lab were going to sell one without the other, I worry that Tillia was the main goal and SL is just a necessity afterthought to get that.

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4 minutes ago, Drayke Newall said:

Odd comparing Mark Kingdon and Ebbe as to different sides of the coin. Whilst I would agree Ebbe is far better than Mark, at least Mark saw future for Second Life and actively tried to make it and not another program more appealing. Also, the reason I said it was odd you comparing the two is, because it is Ironic in the paths that they took were in essence identical and proven to take the same unfortunate end, yet one is hated and the other is not. Let me put it this way.

Under Mark Kingdon's tenure, he wanted to look at a world in which businesses can create independently hosted grids on users/business computers (aka basically Sansar except using SL as the platform). He called it Second Life Enterprise. It failed and led to many layoffs and the final nail in the SL hype train.

Ebbe did, in essence the same except, invested millions more into a separate program to do the same. A separate hostable world except made those worlds downloadable and not streamed. It lead to many layoffs as well as now this where Linden Lab is sold 'Acquired'.

You may say coincidence, I say Ironic.

The issue now is where can SL go from here? in 2010 SL still had a place where Virtual Worlds were all the rage and new ones popping up left right and centre. Now its a different story with near none being looked at. Any company investing in this world is only going to look at dollars and things it can use to make more- especially an investment group. Given Tillia is so linked to SL and it being unlikely Linden Lab were going to sell one without the other, I worry that Tillia was the main goal and SL is just a necessity afterthought to get that.

I agree with you. it's very ironic for me to compare two different individuals. At least i hope everything will go well with the Linden Research Lab.

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3 hours ago, Farthington Whetmore said:

I have been in SL since 2006.  There were millions of subscribers with hundreds of thousand of people logged in at any given time back then.  Today SL is lucky to see 35K login at any given time. The in world economy sucks and sims are too expensive!  Might be a good time to leave...

Um, wut?  All-time max concurrency was roughly 88,000, reached in 2009.  In 2006, you were lucky if you could get 40 people in a region without it crashing.

I don't see why that would affect a decision to leave SL, but, you know, different strokes. 

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2 minutes ago, Nika Talaj said:

Um, wut?  All-time max concurrency was roughly 88,000, reached in 2009.  In 2006, you were lucky if you could get 40 people in a region without it crashing.

I don't see why that would affect a decision to leave SL, but, you know, different strokes. 

thought it was 89k and the system tanked out?  I remember it hitting 88k and services started going offline,  what a not fun time that was.

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I haven't got many thoughts because I haven't had my breakfast yet and I've just read all the posts and my brain has indigestion, and, goodness, there are some knowledgeable people here, and ones with extraordinary powers of memory.

Well, one of the predators acquirers is a bit of a techie, so that helps.  The other represents a sober-viewed successful company.  Seems legit.

The only thing I'm sure of is that I'll continue to spend a lot of money on SL.

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40 minutes ago, Drayke Newall said:

in 2010 SL still had a place where Virtual Worlds were all the rage and new ones popping up left right and centre. Now its a different story with near none being looked at.

There are about a hundred virtual world startups. Ryan Schultz maintains a list on his blog. I've discussed some of them in "The Metaverse and All That" on these forums. Most are not very successful. Almost all are smaller than SL. There is technical progress, though. My interest has been in whether SL could be brought up to modern game standards. The argument for doing so is that a major technical upgrade of SL is easier than getting a few hundred thousand users for a new virtual world. Nobody, including Facebook, has been able to do that. See Sansar, Sinespace, High Fidelity, etc. The value is in the user base and content, not the tech.

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Given the surge of SL during covid and the forthcoming uplift to the cloud, it is likely that it's success has piqued the interest of investors; especially as it bucks the trend where multiple other similar platforms have failed.  This could be a good thing in terms of growth.   First order of business however, is usually to restructure, which obviously causes some turbulence.

Clearly they didn't want Sansar in this package, hence it got offloaded.

Edited by Torric Rodas
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