• by Steve Lundin , July 1, 2010

With Linden Labs' recent 30% staff layoffs and the resignation of its CEO, Mark Kingdon, it seems pretty clear that the company behind the avatar-populated virtual world of Second Life probably doesn't have nine lives left to cash in.

Stepping back into the CEO role is Phillip Rosedale, who had moved aside in 2008, so a new CEO could "focus the company." Rosedale claims that his mission as new/old CEO will be to "focus product priorities." How much can you focus a business idea that is about as fuzzy as a mountain of bacteria growing on a month old tuna salad sandwich?

Second Life has had a spotty track record in its attempt to turn us all into bleary-eyed, basement-dwelling, Mountain Dew-slurping social misfits, interested in spending our evenings engaged in a Massive Multiplayer Online World.

According to a 2007 Inc. interview with Rosedale, Second Life attractions include things like "sex and sadism and spiritual retreats." To his credit these tourist destinations did serve to lure in people, like presidential candidates Hillary Clinton, Barack Obama and John Edwards, all of whom had headquarters in Second Life. Where Hillary's avatar required a helipad (super important in a world where everyone teleports), we can only surmise that Edwards split his time among the various "retreats."

Rosedale further touted Second Life as a "haven for entrepreneurs," populated by merchants selling land, clothes and body part enhancements for Linden Dollars, which can be traded for cash. The other "inhabitants" include people recreating themselves, "cheating" on their spouses in torrid Second Life romances, and those just sort of frozen: avatars that were abandoned after their owners lost interest in the whole affair.

If the Second Life economy is anything like our Real Life economy, the unemployment office is probably the hottest destination in town for the avatars that are still "living."

And then there are the PR and marketing firms, like Leo Burnett and Edelman, that just had to have a presence in Second Life, because all these other companies were there. It wasn't long before these bleeding-edge "playas" were spreading their Second Life hyperbole in the Real World. Hype machines were putting out releases like "1st organic market," "1st tabloid newspaper" and "1st PR campaign" in Second Life.

Well, the Wild West good times didn't last too long because the residents of Second Life community "Dreamland" (population 500) became the 1st to ban PR people from their area.

Rosedale had a hard time raising money for Second Life because investors would repeatedly tell him, "You've got to turn this thing into some kind of a game; it needs to have a purpose." But he figured that if you threw sand into a box someone would come and play in it and cactus flowers would bloom. And they did, for a little while, just not enough to make a bouquet.

Unless your name is Larry David, it's hard to get away with building a business "about nothing." Rosedale may be a great coder, but relying on the imagination of others to fuel your dream gets you nowhere. People don't watch movies to write the last act, but to see it.

Phil Linden (as he's known in the virtual hood), has expressed his desire to spend the "rest of his real life" looking for an audience for Second Life. And he may have to. Rosedale could use some Real Life advice from a fictional classic every technologist in search of a business model should know by heart: Moby Dick.