Second Life’s John Zdanowski

The CFO of Second Life explains what the online virtual world is all about, and how his real-world company measures and rewards employee performance with the Love Machine.

How much of the business actually takes place in Second Life?

We use Second Life as a communication tool. With our geographically diverse team, we regularly have meetings in-world. We find that in-world meetings are much more productive and effective than conference calls. In Second Life, you can see everybody who is on the call; you can instant-message any individual or chat with text to the whole group. It opens up many more channels for communication and information exchange. You can also collaborate on things in-world. Every month, I present our financials in-world, and I’ve projected our financial statements in-world for everyone to view. I think Second Life and other virtual worlds are going to have a pretty profound impact on the way companies interact with their shareholders.

What is your position on calls for more regulation within Second Life?

I think virtual worlds in general will have to evolve and develop in concert with regulators in states and countries. I think you’ve started to see that. As a U.S. company, we clearly had to come out very strongly against gambling specifically. We generally ban any activity that is illegal in your jurisdiction. But we specifically called out gambling, primarily because our credit-card processors were very concerned about us processing payments for gambling activities. I think there probably will be other challenging issues that come up. Some of the lawsuits that happen between residents are also going to set interesting precedents in terms of the DMCA, the Digital Millennium Copyright Act, and how people share and build on top of the creations of others, which happens frequently in Second Life. I think Linden Lab will seek to provide tools that help people protect their intellectual property and try to do that in an open way so that people can continue to develop on top of the technology that we’ve built. That is why we have open-sourced our client, and that’s why in the long run we’ll seek to open-source our server as well. If we can create an open platform that continues to grow, then we will have a very good shot at setting standards for all three-dimensional interactions on the Internet. I think that we will be a very interesting and valuable company if we’re able to do that.

What is the vision for Second Life?

It is to connect us all to an online world that advances the human condition. We believe that people can connect in a very interesting way in Second Life that is not really possible with the two-dimensional Internet. The primary reason for that is that on the regular Internet, there’s typically no presence information; for example, you might be browsing books on Amazon.com and there might be a number of other people that might be browsing those same books, but you wouldn’t know that. But on Second Life, you see the people around you who are interested in the same things that you are.

And I think how people will use virtual-world applications 10 or 15 years from now is very similar to how the Internet has evolved since Netscape first went public and people were just initially building very simple brochure Websites. Now we interact with the Web in a much richer way than we did initially, and I think Second Life will be very similar to that progression.

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