EXCLUSIVE: Philip Linden Reacts to GOM Announcement

by Alphaville Herald on 28/09/05 at 9:30 am

In an exclusive interview with the Herald, Second Life honchissimo Philip Linden gave his reaction to this morning’s announcement that GamingOpenMarket.com would halt trading in L$ as of October 2. Far from stifling competition, Philip sees Linden Lab’s move into the currency-trading arena as one that will enable the entrance of even more resident-created services.

The Herald asked Philip whether the company’s move meant that there was a limit to the innovation LL would accept in their world. Several residents have expressed concern that anything truly useful would simply be co-opted by the company. Did Philip share their fears? Their pain? Their pecan pie?

“We were caught as surprised as everyone else by the GOM announcement, and are now moving even faster to get our own version of an exchange online,” Philip told the Herald in an exclusive interview. (Did I mention this is an exclusive?)

Philip also expressed concern for the SL economy in the short run. “Making this announcement without simultaneously suspending trades seems like the worst possible way to do it in terms of impact on prices and the people using the system,” he said. “I don’t know why they made that choice. If it was to signal their frustration to LL, I think it was a poor choice because it also has a negative impact on the thousands of people using the system. I am happy to see that in the hours following the announcement, although the price of the L$ briefly dropped, it has remained quite stable.”

As to the question of competition, Philip said, “I think it is important that there be many markets with different strategies and features. Outside of GOM, there are multiple currency traders today, such as AnsheChung.com or IGE. We will be adding features like web APIs for currency transactions to make the systems that they have work better and make new systems easier to build.”

Philip noted that forum discussions have included the question of whether GOM would sell their service to another resident or residents. “We would be very supportive of such a purchase, and would gladly help out with that transaction in any way that we could,” Philip said. “I would love to see GOM continue to operate in the hands of other SL residents, and we would certainly help out.”

Philip was unconcerned that GOM’s move — or future move on LL’s part — would discourage other residents from undertaking major projects. “I doubt that residents will shy away from big projects like GOM, given how many incredible opportunities are showing up almost daily now, and how rapidly SL is growing,” he said. “We will sometimes need to add features to the SL platform that will compete with resident projects, and I think that is OK and part of growing SL. I think that most entrepreneurial residents are smart and resourceful enough to jump in regardless.”

The Herald would like to thank LL for permitting its chief executive the time to respond to our questions. Now back to our regularly scheduled muckraking.

15 Responses to “EXCLUSIVE: Philip Linden Reacts to GOM Announcement”

  1. Prokofy Neva

    Sep 28th, 2005

    Walker, Phil made this same “exclusive” statement to the forums and the WA last night. I appreciate that you got an exclusive interview, that’s cool. But then I would hope you would use your brief time in the Sun God Ra’s rays to ask some of the more biting questions. One particularly imporant line of question would be to challenge this absurd statement that the GOM has done something wrong or unexpected by closing. This is like kicking someone in the teeth and then saying, God, you’re ugly with those missing teeth!

    It gets even more absurd when Philip touts IGE as some kind of other worthy currency exchanger when it is IGE’s huge undercutting dumps on GOM that caused it to plummet the last few days — and in fact GOM may have done the prudent thing to close the doors to prevent everything from crashing even further.

    Didn’t Philip’s own announcement that they were going to make their own currency exchange — a month ago! — help sink the GOM? Of course it did, though he denies it. For him to announce it before he had anything online to replace GOM is what is irresponsible — not GOM closing when brought to its knees by IGE and other big dumps. Now, was Philip forced into react mode when GOM announced the breakdown of their deals behind scenes? Well, maybe, but such a giant thing as the cash-out of businesses Philip touts as the chief feature of his game world shouldn’t be a subject only discussed behind closed doors. We’ve never, ever been convinced that killing GOM was necessary to save the Linden — that’s like the proverbial Vietnam village.

    There’s no indication of the quality control problems with IGE here either — they’ve been shut down for credit card transations for days, taking PayPal only, and they also spent days not making any buys. Can we be sure IGE isn’t shutting down? Anshechung.com has the reliability of the land baron behemoth behind it, but has limits greater than GOM or IGE on how much you can exchange (you wonder where Anshe herself will go to cash out lol).

  2. Urizenus

    Sep 28th, 2005

    The issue of sale of GOM is not as simple as selling a RL bank. The trouble is that much of the value of GOM is tied up in the trust that people had in Jamie and company. Obviously reputation isn’t tranferable. If the Lindens seriously wanted to see these kinds of operations flourish (and I’m not sure they do) they might consider setting up a deposit insurance program to cover money that is kept with qualified financial sevices.

    I also tend to agree with Prok that Philip should have been pressed on the question of whether the Lindens put GOM out of business with their recent decision to go into the trader biz themselves.

  3. Walker Spaight

    Sep 28th, 2005

    Yes, Prok, the exclusivity here is slightly tongue in cheek. In fact, I emailed Philip and asked, among other things, whether LL’s move didn’t close the door to competition from residents in this area, in effect putting GOM out of business. We didn’t have a back-and-forth, I’ve simply reprinted his response. It has been exceedingly difficult for us to get any comment at all out of the Lindens, so I was happy just to have the email exchange. Perhaps it’s time for another Philip interview on a wider range of issues, though, a real exclusive this time.

  4. pfffttt

    Sep 28th, 2005

    So now LL is not just printing the money, they are also selling it as fast as they can print it over and above tier fee handouts. Well first they nerfed the stipends and now I see they are opting to control actual sales of currency… So glad I no longer subscribe to the sociapath simulator called second life any longer.

    Only good thing that could come of something like this is them being honest and not shutting down trades whenever they feel they are “overstocked” <

  5. TrannyPet Barmy

    Sep 29th, 2005

    LMAO – “down down down i see you falling” lmfao

    *looking downwards and waving at the falling L$*

    TrannyPet Barmy

  6. Pendari Lorentz

    Sep 29th, 2005

    No pffft, LL is not going to be selling money. The transactions will still be the way they are now, resident sells to resident, resident buys from resident. They are just incorporating the ability to do these transactions into the SL UI.

  7. Marsellus Wallace

    Sep 29th, 2005

    If the Lindens do this, how are they going to base the price of Lindens? At least GOM had some sort of system to keep track of current market value. Will the price of Lindens fluctuate with the Lindens or will it be a flat rate all the time undermining the true value of the Lindens being traded/sold? Unless it fluctuates you can guarantee the value of Lindens will dramatically lesson (they have access to unlimited Lindens too which can flood the market with money) or dramatically increase depending on how they set it up. Should be interesting to say the least.

    Marsellus Wallace

  8. Lordfly Digeridoo

    Sep 29th, 2005

    Does nobody understand how the system is going to work?

    Imagine an official GOM. There. Ta-da.

  9. Jade Lily

    Sep 30th, 2005

    Marsellus, as Pendari said, Linden Lab will simply be enabling currency exchange between residents. The price will fluctuate with the value of the Linden Dollar.

  10. Prokofy Neva

    Sep 30th, 2005

    I find it silly that everyone keeps hectoring and lecturing here about how the Lindens aren’t going to sell currency and it’s “just going to be an exchange” between residents. When OF COURSE what will happen is that the Lindens will now be able to CONTROL that exchange and therefore CONTROL THE MONEY SUPPLY and therefore ultimately indeed control the exchange in various subtle and not-so-subtle ways. I wish all these college boys who have just finished their Econ 101 homework would now step out of their dorms and come and do actual business with exchanges. Here’s just the start of a list of the ways in which they will be able to influence the value of money, even if they don’t print it and sell it themselves:

    1. Commissions — how much? Discounts for bulk sales?
    2. Float — how long will they keep my dollars after I trade my Lindens? I would think they’d want to park the amounst in the money market at PayPal at the very least for a day.
    3. Spread — will they allow listings at all different prices?
    4. Fixed exchange rate — they may opt to put it at $4.00.
    5. Sinks — when they see the value going down “too much,” unlike GOM, which can’t do anything and really is just an exchange, the Lindens will be able to raise the price of texture uploads or introduce other sinks of various kinds — maybe the telehub sales tax they’ve talked about idly in the Linden Hotline in response to Khamon Fate’s question about telehubs. So watch out — this is where they will really be controlling the exchange — by fixing up the sinks elsewhere.
    6. Stipends or dwell — they make take a look at how the exchange is doing each week, and adjust stipends or dwell payments accordingly.
    7. “Chats” about large operations — do you really think that if Anshe puts 16 million on their, they aren’t going to have a chat? GOM wouldn’t be in a position to have a chat. Linden will be able to chat, given that they hold the keys to sims that we’re all really just renting, that aren’t our own.
    8. “Any reason or no reason” — large movements of currency could just lead to expulsions, without too many questions being asked, and “fraud against the community” will be invoked in ways that GOM would never be able to do.
    9. Being “down” — GOM wouldn’t be able to close just because it felt like it; the Lindens will be able to.
    10. Customer service — this could cause price fluctations. As one person already pointed out, giving that their programming already causes considerable inventory lost, is there any reason to believe they won’t lose currency either? At least when you pay Zeppi Schlegel, there’s a transaction record to follow, and having 2 systems in a transaction like that is great for back-up — now we’ll only have the one system to track itself.

    OK, do you get the idea? So please, stop all this hectoring about how the Lindens aren’t “really” in the currency selling business. They will influence it so heavily that they won’t need to be.

    Jade Lilly is so confident that the price will fluctuate with the dollar. As I’ve just explained, they’ll have many ways to make sure it doesn’t fluctuate *too far* — and they’ll use them. That’s the whole reason they took over the exchange.

  11. TrannyPet Barmy

    Oct 1st, 2005

    As much as you know i think you’re a bit of a prick Prok(lol PrickProk) good post.

    As and when one of those Linden fuckers is short of 400 dollars, he’ll come up with some excuse to perm ban you, and pocket your L100k, and easily be able to sell it on their ‘exchange’, with no questions asked, FUCKERS

    Just like those pricks Adam and Colin Linden did to me, although they weren’t quite quick enough to get all of what they could have. LMAO Just as i suspect that wanker Jesse Linden pocketed L50k that should have been given to me(under a different name) prize money after coming 2nd runner up in that crappy SLTV competition, but just as i predicted on The Super Fox Show, they looked for ANY reason they could not to pay up. Hope you fucking choke on it Jesse :)

    Those Linden fucks are the most corrupt bunch of assholes i’ve ever come accross, hopefully the whole place will implode on it’s self some where in the near future. I’ve got my fingers crossed for that event any way :)

    TrannyPet Barmy

  12. Szentasha Salome

    Oct 2nd, 2005

    I am only a few months in SL, and have a growing lingerie business. I love the creativity of the people in SL and appreciate what the Lindens have created.

    I am just adding my small voice here … I am very uncomfortable with the game creators taking over these type of services. There is too much opportunity for corruption and manipulation by individuals who might game the system for their own benefit. Is there any policy in place at LL that states that employees can not play? That would surprise me.

    The whole thing seems rather dangerous. I understand that the Lindens are trying to add features to make it a better game, but I think they are unwittingly damaging the game .. short and long term. We’ll have to see how it shakes out. There is a big spotlight on them right now. If things go bad, it will really shatter confidence in the Lindens, and economy and commerce in SL.

  13. Prokofy Neva

    Oct 3rd, 2005

    TrannyPet, I won’t come to my own defense to prove that I’m not a prick — whatever. But I will come to the defense of Adam, Colin, and Jesse Linden. I’ve had to deal with these three many, many times, on numerous occasions including rather unpleasant things like my permabanning, or the Linden’s insane decision to put up an aqueduct in the middle of the water blighting the view in Wakeley, etc. etc. And I have to say that as Lindens go — and you know I’m very critical — they are among the best, if not THE best. I’ve seen them in many situations, and I just could use the word “wankers” to describe them. Of course, being American, I don’t have the rich understanding of the word “wanker” that you do TPB, but I’m just not getting the issue here.

    If you came in second in the contest, and there was a second prize for the SLTV, and you didn’t get it, that seems like a really authentic beef. So why aren’t you spelling out all the details of this claim and getting the community to back it? But if you beef is that you made an alt after being banned, and then that alt got outed and didn’t get a prize or something, well, we can have sympathy in the sense that many of us here think they’re too trigger-happy with the permabans, but you won’t have that much sympathy if some kind of “workaround” was used on a ban. They’re pretty straightforward on blocking off those escape hatches and when you want to be safe from stalking maniac fucktards, you’re glad of it when it works in your favour.

    So what DID these three Lindens actually do? Charging Lindens with actual theft of LL from residents’ accounts is a very serious charge. As much as I’ve seen Lindens do stuff for ideological reasons like ban people or put stuff back in inventory (as I mentioned) or seize land for Governor Linden in an internal group dispute like GIGAS, etc. — these are all sort of “God-mode” issues that are more about the game and their company’s ideology than they are an ordinary transgression like theft. I don’t believe the Lindens are thieves. So I’d like to hear you back up that claim.

  14. Prokofy Neva

    Oct 3rd, 2005

    Szentasha, you summed up very shortly and sweetly the sense that more and more people have coming into the game. “Is there any policy in place at LL that states that employees cannot play?” Thank you. That says at all. And I’m here to tell you: no. In fact, Lindens are encouraged to play. Many Lindens come from previous residents who had businesses, networks, stature in the game. When they become Lindens, it’s not at all clear how/when/if they leave this behind. We’ve heard there is some sort of unwritten code that residents-turned-Lindens can’t be “big” players, i.e run huge stores or clubs or something handling lots of money or hold lots of land.

    The Lindens as Lindens can hold land within the game, but it seems like it’s just for the purpose of making like little “offices” or homes for discussions in Ambleside. (I’m always wondering if Colin Linden is ever going to do anything with that land he owns in Nipigon). I don’t think they can collect LL in their accounts beyond certain transactions, i.e. to give out prizes. But that’s just why I put on the agenda of the first MJW letter to Phil and the first meeting with Phil and Robin the issue of their ethics, or conduct guidelines. We all sign a TOS. What do they sign? or abide by? It’s not known. It may exist…but we don’t have it yet. They’ve promised it…but it’s been more than 30 days. I’m happy to wait 120 days if they need to start from scratch and write it, I just want them to be “on it”. It’s a complicated matter. They want to be in the world to have a presence. Some of them don’t see anything wrong with the stuff with Jeska modeling or Shaun DJing or Pathfinder joining groups and hanging out. But some of us find that questionable activity, and evidence of a line being crossed.

  15. Smiley

    Oct 4th, 2005

    I guess most us did guess how it was going to work.

    Imagine an official IGE or Anschechung.

    The pro-Phillip shilling job by LD and Blaze Spinnaker made those two look like look like – Ta-da – fools.

    Imagine that.

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