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Why Linden Lab Bought Two E-Commerce Sites

secondlife.jpgShopping in Second Life is a laborious process: There's no good way to find what you're looking for, and even when you hear word someone is selling what you want to buy, getting the "virtual good" involves navigating maze-like, slow-to-load shopping malls. Once there, "buying" something means authorizing money transfers to poorly coded e-commerce scripts rife with mispellings and bugs. The process fails as often as not, prompting IMs to vendors requesting help (who usually offer prompt assitance).

The experience is so miserable for buyers and sellers alike two seperate groups set up their own, alternate web-based portals for Second Life virtual goods shopping. And in an overdue move, Linden Lab, the company behind Second Life, yesterday bought both of them (OnRez and XStreet SL). That'll earn Linden about a 5% cut on sales through its portal.

(No terms of the acquisition deals were released.)

Good idea. The e-commerce portals tended to be the last thing new users to Second Life discovered as they climbed the site's monster learning curve: First they'd discover the plethora of free content available in Second Life, then dip their toe into paying money for virtual goods, and finally migrate to the websites.

And lots of avatars never make that transition: There's so much high-quality free stuff in Second Life now (everything from clothes to cars to homes) there's really not much reason to pay money for anything.

If Linden is smart, they can turn a typical user's progression through Second Life on its head: Integrate the new Linden-sponsored e-commerce sites into new user orientation, and then make it easy and fun (something Linden has struggled with). Done right, navigating Second Life's junkyards of free stuff will become what the old hands do, and new users will be habituated into not just exploring Second Life but spending money there.

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Now for Linden to tackle the problem of how to recruit new users, something we still see no progress on.

See Also:
Is Second Life An Acquisition Target? No
Exclusive: Why Reuters Left Second Life, And How Linden Lab Can Fix It
Real Estate Crashes In Second Life, Too: Linden Lab's Bailout Plan
Second Life Offers Business Teleconferencing, Now Penis-Free

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