Wednesday, January 21, 2009

The swallowing of Xstreet and OnRez, a bittersweet move


So, Linden Lab has finally seen the light about the advantages of World Wide Web integration with Second Life as a complement for information and transactions. Buying Xstreet and OnRez definitely is in their interest.

Now, what should we make of it? There is a fairly large number of issues raised by this. Forget the basic questions such as the timing of integration. There are more important things at stake.

The first one is clear: technological integration and the merger of accounts with the Second Life grid will make business simpler. No need to sign up for an account on a different site and to manage it separately in order to have a Web presence. Doing away with the time wasted to deal with a non-integrated platform could mean less hassle for merchants.

If LL handles this properly, there also is great potential to overhaul the clunky Web presentation in Xstreet and slap better options for Web storefronts. The example of more refined OnRez storefronts should be a good source of inspiration. More flexibility could even make this better. Also, Xstreet's terrible search engine could also be upgraded or replaced for better shopping experience.

As you can see, Linden Lab has a golden opportunity to provide much-needed change. If they aim for greatness and make their e-commerce platform amazing, this might even eliminate the need for external Web sites that many of us currently have.

On the other hand, better integration with the grid can come with a huge tradeoff. Will the new Web platform inherit Second Life's stability problems? Even if you couldn't make a purchase at Xstreet when the grid was down, you could at least surf there in “just looking” mode.

What about culture? There were a few differences between management of SL and Xstreet. If Linden Lab has angered many of us with a variety of bad decisions in the past, Xstreet has been more user-friendly. Will mismanagement show its ugly head on the integrated Xstreet?

Another large question is money.

With the buyout, Linden Lab has conflicting fee policies. At the moment, doing a transaction in Second Life costs nothing but holding land is the main source of spending. In Xstreet, you pay 5 Linden dollars for each 100 of sales. Will LL abolish the Web fees to make business easier, leave it as is, or increase them? The first solution would be the only right one. We already pay enough money on tier and accounts for mainland owners, shouldn't we given a break at some point?

If LL abolishes the currency exchange on Xstreet, it will be a bittersweet move, too. Its PayPal mass pay was much appreciated for instant money transfers. At the same time, a savvy user can squeeze more net money out selling Linden dollars on the official Lindex. Trying to find a matching buying order at specific rates on Xstreet can take much more time... if it happens.

My last note is a bit cynical: did Linden Lab have defensive motives when acquiring Xstreet? When its bosses rebranded SL Exchange into Xstreet, they stated that this was an occasion for them to look beyond SL, should other virtual worlds become more interesting or complementary in the future. Was this buyout a way to make sure that we are all tied to Linden Lab?

That's food for thought, my friends.

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