The question that’s been nagging at me over the last few hours is “Why would Lab staff leak information about a buyout offer?”
Well the Lab itself is notoriously closed-mouth, but individual staffers tend to be chatterboxes, often about all sorts of things that they probably rightly shouldn’t. Why this though?
It’s normally “not the done thing” for parties to a potential buyout to say anything about it. It’s kept a deep, dark secret. There’s not actually any real regulatory requirements about that sort of thing, but there are other reasons for it.
One is, that if it becomes known that an offer has been presented, it invites competition from other parties who might decide they want to be the winning buyer, or who simply want to block a competitor.
So, leaking information drives the prices up.
Because of this, a potential buyer will oftentimes pull out of an offer if word starts to get around.
So, there’s a few possibilities here.
- Some staffers may not be happy with the idea of Microsoft becoming an owner, or about potential loss-of-employment involved in a buyout (whether perceived or actual).
- The offer simply wasn’t good enough.
- Staff can’t keep their mouths shut.
I’ve been piecing together what I can, and actually the notion of an offer seems plausible.
It goes something like this:
Some company (which may or may not be Microsoft) makes a bid on Linden Lab. Not necessarily because of any particular interest in Second Life, but perhaps as just one of several acquisitions in related spaces. As of 1 October, if nothing has gone sour, the Lab should be back to positive profitability, if it isn’t already.
However, because of the way Second Life and Linden Lab has been treated in the media of late, the offer is far lower than anyone would like. The board pushes back or otherwise declines. Individual employees (perhaps someone sitting just a wee bit too close to or passing by a certain fax machine at a critical time) have already gotten wind of the offer, though. It’s one of the delights of open-plan office spaces.
They think the offer is too low, or don’t like the bidder, or are worried about their jobs. Whatever the motivation, they put the word out, either to sour the buyer, or to push the offer price up. Microsoft’s name might have been put in because it is a competitor to the bidder, rather than being the actual bidder, in the hopes that the bidder will back-off, or up their offer. This information goes out along the same lines as advance news about the layoffs, Mark Kingdon’s departure from the Lab and numerous other such tidbits.
Which of those presumably-hoped-for-results actually happens, then, is dependent on how important Second Life is to the bidder as an acquisition. If it’s just part of a broad strategy involving a number of acquisitions, then it’ll probably be dropped. If Second Life was a specific tactical target, then the offer might go up.
That’s my rede anyway. It fits the little pieces that I’ve been able to assemble. You’re welcome to have a stab at your own scenarios.
Doesn’t Microsoft have a bad enough reputation in many people’s eyes without adding owning Second Life to its list of faults?
I meant that in the nicest way possible.
other than Tizzers…Who isn’t staff…Who actually leaked? Ex Staff? Current Linden Staff about to lose their jobs? High ranking Linden staff?
More than the question ‘why it leaked’ i would be interested in ‘why is X buying LL/SL’, Tateru.
Probably because this would me as resident help to understand (predict) how it will affect me.
A1- a company simply must burn some money to keep their taxes low. In this case it might mean, SL will be put into a drawer. The company spends money once for the acquisition, but not for assigning staff for future development. Probably the worst scenario – no future.
A2- same as above, a company burns money for the acquisition, this time not for tax reasons, but for removing SL as competitor. Possible candidates IMVU, Frenzoo, BlueMars or ‘others’.
B- the buyer is interested in the technology and infrastructure for unknown use – but maybe not in the community. Also bad.
C- the buyer is the noble knight on the white horse, buying LL/SL to develop it to new technologic frontiers. To invest in the community, bringing fast easy fun. Hm.
Whatever will happen: i doubt the new owner will be interested in the SL community.
I’m really in sorrow. As full-time creator my biggest fear is that SL will change into what is described at zdnet/tomahardware: SL becoming (in case of Microsoft) just an addition to Microsoft-Life, just a 3D-chat where Halo-players can talk and Trade Microsoft-Points.
No, it’s not fear…it’s close to panic.
I agree with what Resi is getting at, I think. If they are going to leak all over themselves then why would they leak to somebody who has a score to settle with LL? Isn’t Tizzers still banned from SL? That’s just a weird way to leak. They have to know that people would not take Tizzers word on it seriously.
That said, I do not know Tizzers very well, but from the contact I have had with him my impression is that Tizzers is a great builder and a good person who does love to do things for the LULZ sometimes. I don’t mean to call him dishonest. I just think that the idea of LL leaking to him is too weird to be true. It seems more likely that he’s having a good lol at us for taking it seriously.
I presume this Tizzers heard about it from the same people that I did.
After the whole kerfuffle with Cory’s departure (and a bit of an internal witch-hunt that followed), Linden staff are way too sensitive to talk to folks like me directly, except through official channels.
Back then, the Lab thought that some Linden staffer(s) must have passed internal info to us at Second Life Insider, but that was actually not the case. Instead, it had been leaked to ex-Lindens and members of the general population, and we’d picked it up from them. We were just the ones who’d published first.
This sort of thing happens routinely. Cory, Philip going from CEO to chairman, M departing, layoffs… the list goes on. The info from certain non- or ex-Lindens has always been solid. By the time I hear about them, generally hundreds of people already know, but nobody’s yet written about them. If enough people know, it inevitably winds up in my mailbox.
I remember writing about the layoffs before they happened, and getting a ton of “You’re out of your mind, Tateru!” emails, which suddenly dried up when the news broke later. Ditto for a whole bunch of other things. Some tips I treat with more scepticism than others. Philip being bumped to chairman? I didn’t buy that one right away, but eventually you get a sense of which people are always on the money and which aren’t.
Just so you know, at precisely 4:30 PM yesterday, EST, this story was officially “-gated” on Twitter.
http://twitter.com/#search?q=%23tizzersgate
In other words, there is already somebody tweeting with a #Tizzersgate tag.
*face palm*
A lot of the actions taken by Linden Lab recently, that you’ve written about, are consistent with a buy out. What really motivated the individual(s) to leak this information in the first place? So ‘Why leak?’ is a good question.
Another thing we can all have a think about is… now that the rumour is out, what are the implications?
Now the word is out, will MS (or whoever) still want to proceed? Who else, if anyone, might want some of the action? Apart from an actual buy out, are there any other reasons this kind of rumour would benefit Linden Lab?
I’m afraid it seems like we live in interesting times.
*First time comment here
Also, now that I think about it, SL would make a good addition to the MS arsenal as an offering for Kinect.
@Mitul, and i really hoped LL would license Kinect (or just buy Microsoft).
About the implications, i don’t want to add more speculations that base on a speculation – so i just my consequences: i cashed out my L$. Call it panic or safe-harbor, but I expect that we (SL users) will get the official statement when all decisions are made. I an official blog posting like: “We (LL) are happy to announce that LL does not exist anymore. SL is now under the hood of Microsoft. SL will remain open with just one change, the in-world currency L$ will be converted into Microsoft-Points. That’s great news !. While you can’t convert MS-Points to US$, you can buy a lot of games with it.”
Hm, if I’m not wrong, SL’s Terms of service would allow that…
There is also the possibility that the Lab is trying to cover one bad news story with a bigger news story. LL could well stand to get some print press flack for killing Avatars United and what’s better to temper editorial ranting about the company everyone loves to hate than to make them up for grabs.
I’m watching with interest, there is definitely not just smoke in this one. I’m glad you came and added credence to this yesterday. As I have said elsewhere, Tizzers has dropped a few bulls eyes in his time, and been dead on before everybody else. A few people have contacted me off the record to confirm what Tizzers has told me, but there are (unsurprisingly) no direct sources as yet. Full disclosure from me on this- i do social media/community for Techeye.
It was very interesting to watch the bashes I got yesterday early over this suddenly go very quiet. Anyone that knows me from Twitter, knows I am unafraid of putting an oar in, but I also head for the truth, and I think both techeye and Tateru have as much of the truth that is out there at the moment.
Note this whole thing has grown beyond any ‘Tizzergate’. Either there’s really a lot of bad journalism going even with the likes of zdnet claiming “my inside sources”, or this is more than a one tweet rumor.
Tateru makes excellent points about why leak and past Linden Lab behavior regarding leaks. And it’s been “no comment” on both ends of the spectrum. “No comment” is usual for Microsoft, and Linden Lab would make up a mere blip of its existence if consumed. It’s not exactly the same on our end of the things. The LindeX is Second Life’s heart monitor, and the life blood of an L$ is any confidence we put in it. Prolonged uncertainty, no matter if one is optimistic or pessimistic about the one of two outcomes of any issue as big as this only creates anxiety which is antithesis to confidence.
That’s what befuddles me the most, if its a rumor and its spread all the way up to even big industry blogs and news sources, why hasn’t Linden Lab squashed it? Are they waiting for a TechCrunch article? A tweet could end the rumors if they’re just that.
I’ve been in hotel management for about 20 years, in this business offers are made on properties all the time (the property I work at now receives an offer at least once a month, sometimes once a week). The “frontline” staff rarely ever hear about these offers.
What usually happens, I get one, I contact the owner and the offer is shredded. Every once in a while, the offer isn’t shredded immediately, and someone at the desk will catch a glimpse of one or two paragraphs of a letter.
Immediately rumours will start flying and finally someone will get the nerve to ask me what’s going on.
Looks like in the end, Tizzers may have just successfully trolled the Internet media:
http://alphavilleherald.com/2010/10/tizzers-trolls-twitter-microsoft.html
I’d say you got played, Tateru. But don’t feel bad about it, you’re in good company. And IMHO, I’m glad it’s just a trolling. If LL were to sell off SL, the last entity they should sell it to would be Microsoft because it would potentially be a death knell for SL on Mac/Linux and TPVs(they’ll make SL Windows/XBox-only and likely change the viewer licensing to standard MS EULA).
you are exactly right, MS could simply buy SL so no one else does and even just shut it down. why do companies do this? well they buy other companies all the time to grab some part of them for use in their products, reduce competition, or a host of who knows what other reasons
i like that Tizzers (i don’t know who that is) is claiming credit for a spoof, but this rumour has been around longer than Tizzers has!
you know what, i am going to take the credit for spreading this thing – why not?
so wherever the very first post of this was, that was me as another person
Tiizzers, lol on taking credit for this!
btw, i also started the whole Bill gates things, there is no such person, that was me working on marketing – pretty good eh?
pffft
you go Tateru! there is always truth and passion in your posts!
ha ha ha, i went over to whoever Tizzers is on alphaville to see their post; how funny to think that doing this is some sort of accomplishment?
i used the example of yelling fire at the cinema
btw, gold prices just dropped to $100 an ounce . . .
Oh right, I see, I think.
Phew, at least I don’t need to go and buy an xbox and kinect thingy now.
@Little Guest, will you be transferring back to L$, I wonder how many other people did exactly the same?
@Ener Hax, that is an appropriate example I think.
Although I am now even further troubled by the number of different reports that talked about how this was confirmed by their ‘sources’. I know we started off with ‘why leak?’, I’m just hoping we don’t finish with ‘why talk nonsense?’
Two Labbers contacted me today about this. I’ve summarised.
Another connected bit of info that no one was willing to discuss is that Catherine Linden was LL’s information czar. When something got out she or others didn’t like, she was the one to deal with it. She’s no longer employed by the Lab so maybe the culture of silence has weakened.
I confess, often i behave the ‘frightened rabbit style’ – trying to save my a** from bad surprises
.
.
Surely, i’m unbelivable happy that it ‘seems’ to be more smoke than fire.
About my money, i had saved for quite a while with the goal to invest it into a sim. (so, saved for the setup fee + tier for one year).
Now i wil leave it in the safe place until i actually spend it (still, this back and forth cost me some conversion fees, but better loosing a bit on fees than everything in the big bang.)
My dream of continuing and maybe growing in SL did not die or take damage
hey Little Guest, why not install OpenSim on a USB stick and start building on your dream like that for free? then you can save the OAR file if you do OpenSim or export your builds for use in Second Life! =)
if i can install it then anyone can! just ask . . . =)
@Ener, i have tested already some month ago. It worked on my local machine, and even in my LAN.
But i ran into 2 ‘problems’, security when opening to Hypergrid (as i understood it would be risky to allow people to come in with attached scripts. And the major issue: i wasn’t able to set up a ‘persistant’ database (not able to switch from SQLite to MySql. So everytime i logged in i was ruthed.
But i’m looking forward for the next try (and will pay attention your website now, too)
hi Little Guest – oh, i was meaning to use it as a place to create some of your own things, not to hypergrid out. but, HG 1.5 is being refined as is OpenSim to lock down the creator’s name on objects. right now if i make something and give it to you and you save a sim as an OAR, when you load that OAR, it will show all objects with you as the creator, even the thing i gave you. in later versions of OpenSim, that won’t happen anymore
it is not all there yet, but will be in time (i dunno, maybe 6 months or so?)
good luck! =)
If Microsoft did buy Second Life or Linden Lab the entire thing would be shut down and it would turn in to Playstation home. Probably would be named Xbox Live Home or something like that, and there would be no more sex and only companies would be able to advertise in it. So, hopefully, this is just a rumor, and nothing will come of it, because if it did then chances are it would be just another 3d chatroom.