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Linden Lab CEO: No credit crunch in 'Second Life'

q&a Mark Kingdon says the virtual world, which is "only now starting to realize its full potential," is still seeing record-breaking Lindex currency trade levels.

q&a Mark Kingdon became Linden Lab CEO in May, when founder Philip Rosedale stepped aside to take a more active role in developing Second Life.

The hype surrounding virtual worlds a year ago appears to have died down in recent months, but when caught up with him, Kingdon was keen to point out that there's still life in Second Life.

Mark Kingdon's Second Life avatar Linden Lab

Q: What's happened to the hype?
Kingdon: It would be a huge mistake to assume hype and success are interchangeable. Hype is born from anticipation, intrigue, and excitement, and as such, it naturally settles down as any product matures. Take the iPod or the Nintendo Wii as examples.

Second Life, which launched with real fanfare, has now cemented its place as a significant part of popular culture. Sure, the hype has died down a bit, but I'd gladly trade short-term hype for the continued long-term success we're seeing.

I joined Linden Lab three months ago as CEO for the reason that it's a company only now starting to realize its full potential.

Has Second Life use leveled out?
Kingdon: Use of Second Life is nowhere near leveling out. In the last month, the Lindex currency exchange saw record-breaking levels of trade in Linden Dollars, hitting 120 million Linden Dollars on just one day in August alone. There's no credit crunch in Second Life!

We are also seeing a wide variety of use cases on the (Second Life) grid and a far greater level of resident engagement. All the signs are good.

Are businesses still investing in Second Life?
Kingdon: Businesses are investing in Second Life real estate and engaging with the Second Life grid more than ever before. Check out what the BBC, BT, Cisco, Diageo, IBM, KPMG, Orange, Unilever, and Vodafone are doing.

What are they using it for?
Kingdon: What I would say is that there has been a real shift in use by businesses. Initially, many businesses saw it as a shop window or a billboard. It was all about the eyeballs. The thinking went, if you've got over 14 million registered residents, it made sense to get your brand in front of those people.

But now businesses are looking to engage, not just display. So we see recruitment fairs taking place, product demonstrations, and companies using Second Life for in-world meetings, training sessions, and collaboration.

We're also seeing real public-sector interest, with universities really buying into the potential to get students meeting, collaborating, and communicating in-world.

Organizations are now really starting to see the full potential of virtual worlds like Second Life.

What are the big trends emerging in virtual worlds?
Kingdon: There is a major move away from simply "being there" to making that presence a very real and strategic part of the business.

When the Internet came along, a lot of businesses realized they needed to have a Web site. But for many, it was a few years before they really started to wonder about what they should actually be doing with it.

The timescales with Second Life are dramatically shorter, but we are still only now seeing for ourselves just how big this could be. Take the example of universities. They cannot only hold lectures and seminars in-world, but they can also create fully interactive, immersive environments where students can communicate with tutors and professors, and explore virtual-learning tools.

Businesses, meanwhile, are using Second Life to get closer to their customers but also to staff. Everything from internal meetings to product showcases to the development of prototype models is happening right now in-world. In the last few weeks, I've even heard about movie studios creating sets in-world to plan scenes and logistics before building on a real-life sound stage.

Businesses are now really exercising the full scope of their creativity, and the great thing about this is that the only limit is their own imagination and ambition. That is the great benefit of the Second Life grid. It's a blank canvas of almost infinite potential.

What challenges does Second Life face?
Kingdon: Linden Lab faces the same challenges as any other business, retaining and attracting quality staff and customers or users, staying true to our core values, staying ahead of the competition, and making enough money to stay in business and reinvest in the business.

It's a mistake to ever think your business isn't ruled by those common requirements. We've all seen online businesses, for example, that never satisfied the last requirement in that list.

What do you think the future holds for Second Life and virtual worlds in general?
Kingdon: Linden Lab and Second Life are really at the cutting edge of the virtual-world phenomenon, and much of the innovation in-world is driven by residents.

That innovation will continue to ramp up, engagement will increase, and Second Life will increasingly become a strategic part of an organization's IT use and online presence.

To be honest, I can't think of a time I've been in-world and haven't been blown away by what residents are doing on the Second Life grid. That is the real power of the model, and that is the reason why it would be really easy to underestimate just what can be achieved in one year, five years, or 10 years. But it should be great fun finding out.

Tim Ferguson of reported from London.