Interview with Linden Lab's Ginsu Yoon

Last week, the Industry Standard interviewed Linden Lab Business Affairs Vice President Ginsu Yoon at Linden Lab's San Francisco office. Yoon discussed the company's enterprise plans, including the Second Life Grid and a new turnkey service designed by Rivers Run Red that lets companies hold virtual meetings in Second Life (look for a special report about this service on the Standard later this month). The executive also touched upon Linden Lab's financial health, the challenges posed by the rise of laptop computers and other mobile devices, and the "heightened rhetoric" surrounding the company's enterprise plans.

The Industry Standard: What is different now about Second Life and the enterprise space now compared to the way it was two years ago?

Yoon: I think over the last two years more general market familiarity with the concept of virtual worlds. There are certainly within our own active user base and our revenue base an increasing proportion of enterprise and educational users.

Ironically, we don't actually have a perfect read on how many of our users are actually buying from enterprises or using it for educational purposes. Because a lot of the data that you need for that has to be relayed from the appropriate billing systems set up for enterprise use. As you probably know, most of our users use their individual credit cards. We don't have the kinds of purchasing systems that enterprises are used to. So we have to take a look as the data as best as we can and tie it back to surveys, and tie it back to spot sampling. From that kind of analysis, over the last year or so, it seems that our enterprise-focused user base, maybe enterprise and education together, are in approximately the 20 percent range. Which is probably obviously a fairly significant portion of the overall usage of Second Life or the overall revenue. And it's also faster growing than probably other categories.

Second Life as always been a place -- from our point of view as the company that operates it -- we go where the customers tell us to go. Obviously we don't have the direction in terms of content and structure of the management of the in-world experience. We're doing more and more of that these days. But that's because we've learned from the user base what they want in a consumer experience. And similarly, we've learned from the user base that they want more enterprise-friendly use. So, I think that that's been the change.

Also, We're a larger company now. I think we grew probably 100 employees over the last year. I think we started the year with somewhere in the high 100s, close to 200, and now we're close to 300. We just didn't have the bandwidth a year ago, certainly not two years ago to attack more market segments.

Industry Standard: Now I remember reading about a year ago that Linden Lab was profitable at that time. Has the new expansion come because you've been growing revenue or more because of investments to help support that?

Yoon: We have not raised any financing since the last time it was publicly reported. In terms of profitability, I don't want to go beyond what our fact sheet says. Our situation is very good.

Industry Standard: Even with the downturn in the economy?

Yoon: The downturn has only been for a month or two. It's too early to say, and I certainly don't want to overly characterize our user base. But I can say in the last month we have had our highest numbers ever in terms of hours of usage, in terms of active users, and I believe in terms of revenue. So we had a very strong month. Now there are all sorts of theories about why, particularly coming out of the gaming press, there are all sorts of