If one were to believe geeky sites like Digg, Microsoft, the venerable tech-giant, and eBay, the poster-boy of making money on the internet are on their last legs. Any day now, they are going to be kicked over, to be acquired by fill in the blank here.

The latest one is about how eBay is a total joke. Does eBay’s customer service suck? I’m sure it does, like 99% of the behemoth corporations out there. Has anyone tried the customer service of a cellphone company? Now that is pain.

Yet many of these geeks, so insistent that they are right and that their views are shared by everyone continually sound the alarm. After all, they don’t like Microsoft (and eBay), and thus they must be dying companies.

Just like the previous bubble-crash forced everyone to actually look at dollars and sense, its time we focus back on what is working (and what isn’t). The world is more than just search engine revenue. Case in point: Microsoft’s profit for the latest quarter was 2.63 billion dollars. Last time I checked, a company with a profit over 10 billion dollars a year was in no imminent threat. Could they make a lot more money by hitting up Google? Damn straight. But if I was a dying company at 10 billion profit a year - well, it is a sacrifice I am willing to take

I of course say the above knowing that there are organizational problems and what not that they have to contend with. But with Vista and Office 2007 coming out, all I see in the near future is Microsoft printing more (and more) money.

eBay itself is of course ’struggling’ with hefty profits itself. Not Microsoft (or even Google-level) but still … 1 billion in profit a year.

Ford is a company in its death throes. Microsoft or eBay? Don’t think so.

Second Life this, Second Life that.

I ran across the funny little parody Get a First Life when it was mentioned on TechCrunch.

Parodies are a great way to get a point across, provided people understand that it is a parody (when I see people taking Colbert seriously as a right-wing ‘pundit’, I shake my head). And if there is anything that needs to be gotten across, it is this: Second Life is over-rated

For those that have read my about page, you will know that I was once very intimately acquainted with MMOs and their large virtual worlds. Second Life was then, and still is, cumbersome, confusing, and crap. There, I said it.

Back in 2004 I met the Linden Labs fellows. I was hanging around with the IGE folk, and they were very close to having a deal signed. In fact, they did have a verbal agreement. They would provide the backend/market, and Linden Labs would sanction them as the ‘official’ company to go to. It would be win-win - Linden would get much needed income flow (the ‘world’ was floundering), and IGE would get its first official backing.

I left IGE soon after that (I was always marked as an independent contractor), and the deal never went through. From what my sources told me, Linden Labs had inflated the numbers, and having gotten greedy, had pushed out IGE in favor of setting up their own system.

So there are two things I want to raise issue with:

1. Second Life is over-rated And not over-rated like some sports player. Over-rated like the Origami Project (which I admit may still become useful). The numbers and metrics thrown around make no sense, and I don’t understand why people do not point that out. From BusinessWeek comes the number that a total of 1.5 million people have logged into SL once. Of that, only 17% still logged in after 30 days. But anyone that has worked with MMOs know that 30 days is no big deal. The real staying power is 90+ days. At that point, the player has done a significant investment into the world he/she is playing in. With the way Second Life is setup, how many of the users are actually contributing to Linden Lab’s bottom line?
2. The amount of money made in Second Life is a pittance. There was all this hype and news about how Anshe Chung becomes the first virtual world millionaire. Bullshit. The story (really a press release) made as much sense as Kevin Rose making 60 million dollars. Two things yelled ugh about this press release:
   1. Using some fuzzy math, Anshe claimed to be worth a million dollars. She doesn’t have a million dollars (far from it). But golly gosh darn it, she is worth that much. Nevermind having to find someone that actually pays that amount …
   2. What about Yantis, Brock, et all (of IGE fame). Back when I left them over two years ago, they were pulling $200,000 a day in revenue. Profit margins (never officially confirmed to me) were in the neighbourhood of 25%. That would mean roughly $50,000 a day in profit. That equates to $18.3 million in profit a year! Steve Slayer, the president of IGE, estimated the worldwide secondary market to be worth $800,000,000 over two years ago. So, I’m sorry, but Anshe’s story (already built on fuzzy math) is nothing impressive. IGE and the rest (even smaller companies like Lewt and Mogs) make more than a million dollars a year.

I will end with one final comparison. A 2006 year in review post by Terra Nova stated that Second Life’s peak concurrency was 20,000. I remember EverQuest 1 hit a concurrency of 100,000 when it had 500,000 paying subscribers. Second Life just does not warrant all the attention it gets.

I get confused easily. I think its a personal character trait - I am rather accident prone, and have the oddest bruises at any given moment to prove it.

I also have a bit of a love/hate relationship with Arrington. My initial qualm was the hype train he was on, only talking about this financing or that financing with what seemed highly tainted windows. There seemed to be almost no criticism of these companies. It really peaked when all the evite sites came out with million dollar funding - is inviting people such a huge problem online?

But my love for him has gone up recently, with good topics such as blog linking declining, analyzing deleted blog posts, Apple being bullies and so forth. A lot less hype too - thats good!

Yet he continues to puzzle me about the evil PayPerPost. If the company is so evil, and if he wishes it would die - why such obsession? So he doesn’t like paid-blog posting - that is fine. Mention who evil PayPerPost is the first time, and then move on and talk about the problem (and not the company). Even subsequent posts about companies that pay you to blog (which all have much more clarified disclosure policies) were always compared to PayPerPost. This post about ReviewMe and CreamAid only mentions PayPerPost in the title. This next post about ReviewMe launching again mentions PayPerPost in the title. When the FTC announced it will start regulating word-of-mouth marketing, the title was all about FTC regulating PayPerPost. The latest post, just one day old, was about Another PayPerPost competitor. No need to mention SponsoredReviews.com (the actual site the content was about) - naw, lets just mention PayPerPost again.

Arrington’s Techcrunch is large, making it an easy target. But the point remains - if PayPerPost is so evil, why continually mention them? Sites like ReviewMe are very clear about their disclosure policy. As long as there is disclosure and there is no editorial control - what the hell is the problem? A company gets exposure without having to go through expensive PR machinery. Blogs are a great way of getting honest feedback. From the bloggers perspective - great! You are being paid to review. You are taking the time to analyze something - why shouldn’t you be compensated? Look at Graywolf’s review of TLA. He immediately announces it is a paid review, he does a decent review of the site, and he closes with again reminding the user that the post was paid.

PayPerPost let the advertiser force a positive review. It required no disclosure. ReviewMe (amongst others) did not let the advertiser demand anything. And there had to be disclosure. So why even compare the two?