Virtual World, Real Complaints

When Philip Rosedale appeared on the cover of Inc. in February 2007, he and his team at Linden Lab had built Second Life into a fast-growing virtual community with two million residents. Now, Second Life has some 16 million users, who spend more than $300 million a year in its in-world economy to buy virtual goods like clothing and homes. But Linden Lab is still going through some real-world growing pains. As the tech blog GigaOm reported, in October several disgruntled Second Life users immolated their avatars in front of Linden Lab's in-world offices. The cause of the avataricide was a steep price increase for virtual land, a change that drew thousands of complaints from users.

In May of last year, Rosedale stepped down as CEO to focus on the company's long-term vision. He was replaced by Mark Kingdon, a veteran of the online ad world. Kingdon says that Second Life's main revenue streams, like fees for virtual land, are doing just fine. "All technologies go through a hype and an antihype phase," says Kingdon. "Second Life is in its posthype phase. But it's still a very viable, profitable business."