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Why leak?

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.

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