For years there has been an ongoing conflict between two mainland commercial forces: the landbot runner and the ad farmer. The land bot runner makes his money by hedging low land prices and selling to market prices, profiting a few percent or more on large volume of millions of square meters of churn per month. The landbotter will grab up parcels as cheaply as possible, frequently stealing land mistakenly priced low by mistake or which was intended to be a friendly transaction between friends (for many SL users, the user name lookup dialog freezes their SL client for up to a minute due to LL laziness/asset server scalability issues, so they sell their parcel to "anybody" thinking that nobody else in the sim means no bots will steal the land).The landbotter is a drag on market prices, driving the average price paid per parcel down, like any Bernie Madoff doing large scale naked shorting of a stock. It is thus the natural outcome that large scale land bot operations tank real estate prices. Normal land sellers see the LL published average market prices, which average all land sales, and try to underbid the average. With landbotters constantly seeking to underbid the average, they wind up dragging the average down with them.
There is also a non-market drag on prices, and these are the low priced transfers between friends. If you sell to a friend for a few L or a few hundred L, your sale is registered and the price paid drags down the average. This is why, at the present time, the published market average for mainland says the price is 1.6 L$ per square meter but the lowest price you can find land for sale in search on the mainland is 2.1, with the average ranging above 3.0 L$ per square meter, almost twice the LL published average. This is because the averge user sells their land at below the low false average, their land quickly gets bought up by land bots and set for sale at a higher price.
Frequently, these friend-to-friend transactions get interfered with by land bot runners and the land gets taken at a low price, but no matter who winds up with the land, it drags down average price stats. Some land bot runners claim to be "ethical" and assert that they will return land caught in this way. They may have good intentions here, but their actions, of selling the land back at the same price, causes TWO sales at the low price to be registered, which only exacerbates the erosion of average price stats even more. So even when land bot runners claim to be doing good, they are doing evil.
This pattern of price erosion motivates people to seek to liquidate their land sooner rather than later, which only contributes to the crash. This is not a unique pattern. Hedge fund managers have used their ability to do what is called "naked shorting" of RL stocks they dont actually own (simply by using as collateral other securities they held in other stocks, even shorts on other stocks, or simply unsecured credit). This sort of shorting behavior on US stock markets is estimated to have cost investors on US stock exchanges over $ 1 trillion dollars during the 1990's alone. The losses taken in the current market due to such trading amount to possibly the tens of trillions of dollars.
Now, land prices werent always in the tank, were they? Nope, they were once quite high, and people investing in land could count on seeing their investment increase in value over time as SL became more popular. With concurrency at an all time high, reason says that land prices should be very high today. When I joined SL in 2006, concurrency was significantly less than 8,000. Today it is ten times higher, but the grid itself has only grown by a factor of five. This SHOULD mean that demand for land should be twice as much as back then, but land prices then were about 8-12L$/sqm vs 2-4 L$ /sqm today. You could say that the RL economy has eroded peoples disposable incomes, but people have not seen a 66% decrease in disposable income. Something else has driven down land prices, and that is land bots.
But, you may counter, landbots were here back then too, why didnt they drive down average prices back then? The answer is that their erosive effects were counterbalanced at the time by another economic force that sold land at high prices. That counterbalancing force was the adfarmer.
The Ad Farmer's business was two fold: to generate advertising revenue by having as many small advertising locations in as many regions as possible on the grid (because region capacities are low, and advertising is a numbers game, you have to have exposure in many many areas to get the amount of CPM expected of paying advertisers), as well as to enhance revenue by putting parcels on sale to local residents that reflects a few things: a) the local prim scarcity conditions if most of the rest of the land in the sim is sold, and b) the opportunity cost of the Ad Farmer for investing money and labor in establishing that ad location and the fractional pro-rata cost of tier, and c) the market value of an "improved" view for other residents. These combined factors would result to any business accountant to value such parcels at 3-10 times the market price. The invariable and unalterable law of supply and demand states that the last prims available in a sim are effectively priceless to a resident who has too much work invested in the build in their sim and needs those last prims. For this reason, small ad parcels rightfully commanded higher prices for these several legitimate business reasons.
A 64 sqm adfarm parcel selling at 10 times market price averages would have a positive upward effect on the market average on the same scale as a 640 square meter parcel sold at 1 L$ dragged down the average. Thus the market impact of the land bot runner was counterbalanced by the ad farmer, which led to prices being relatively stable and they moved more or less in reflection to actual market forces of average buyers and sellers.
It is true however that some ad farmers operated in an unethical and malicious manner: intentionally placing annoying spinning prims on their land, even offensive griefing images like 'goatse', and refusing to come clean up their land like good neighbors. Many of such annoyance methods were clearly against the terms of service on their own and should have rightly been punished for such behavior. I dont know how many times friends with land on the mainland asked me for help in dealing with such nuisance parcels. My abuse reports and calls to concierge for assistance never resulted in a governance team member showing up to clean things up. It was as if the governance team was *INTENTIONALLY* refusing to enforce the TOS in such situations for a reason. That reason seemed to be that they wanted to make life uncomfortable for residents on the mainland purposely to engender public support for the banning of ad farming.
Another method alleged to be used by some people accused of being ad farmers is called the "donut hole", which we will get into detail here, because this tactic can be used by the ad farmer or the land botter in reverse. A donut hole is ostensibly created by buying a parcel, and subdividing a small parcel in the center of it which is sold at a high price in comparison to the rest of the parcel, which is sold at below average prices. The buyer, according to standard theory, discovers the 'donut hole' after taking over the large parcel and removing some prim or object that was obstructing the view of the parcel, and in order to use their parcel for anything, has to buy the small parcel at a high price. Thus comes the accusation that these sort of land brokers are "land extortionists". Note that in the example, there are no advertising boards involved (though admittedly, some would use the adboards to obstruct the view of the small parcel).
If such a tactic is used as described above, this is clearly manipulative and can be done without any advertising involved. The practice should rightly be stamped out. The problem, of course, is determining if this was the actual course of events that transpired or whether something ELSE actually happened.
A group of land bot runners have organized a faux 'environmental' group in SL called The Arbor Project. While you can hardly find a linden tree on any of their land, thus belying the lie of the name 'Arbor', the group tier donations made by hundreds of easily deceived individuals with good intentions are used as a land bank to manage the static inventory of these land bot runners. What a great way to minimize ones operating costs eh? Get some "useful idiot" as Lenin would say, to donate tier to your front group to 'benefit the community' when actually they are helping you, the landbotter, cut your operating costs.
Land bot operators hate people who own small parcels. Small parcels, while very useful to a new user who is building a content business in the sandboxes and needs some place to lay down a few prims for xstreet content servers (SLX in the old days), is inconvenient to a land bot runner because land bots are rather stupid when it comes to parcelling land up, and when they run into a small parcel owned by someone, it tends to break the bot. It takes a lot of investment in programming to make the bot smarter. This of course makes the land bot runners profits smaller.... not a good thing. Small parcels also make their adjacent parcels ugly and less sellable.
So, land bot runners, particularly those behind the Arbor Project scam, like to accuse anybody who has a parcel smaller than 512 square meters of being a "land extortionist" if they try to sell their land for what its worth. They claim that no parcel smaller than 512 square meters is useful for anything. Of course, with the age of sculpties upon us, you can actually do a lot with the 58 prims of a 256 square meter parcel. There is a very nice 13 prim skybox you can get on xstreet that will fit on it, or a nice 10x10 meter store with 14 prims, not even using sculpties. You can install some vendors, xstreet content server boxes, camping chairs, and furniture within a 58 prim limit without problem. So the claim that small parcel owners are 'land extortionists' and that small parcels are useless is blatantly false, yet promoted in the Arbor Groups manual of -stealing other peoples land-/abuse reporting "commercialized parcels". This is a very elitist, classist attitude, don't you think? It punishes the newbies and working poor who are just getting their second lives going. It punishes the entrepreneurs who see such a market segment as an opportunity to make money helping others get a leg up economically or just having a place to call home. It also punishes the legitimate advertisers who do not engage in abusive tactics like those previously described.
The problem since the banning of advertising networks larger than 50 parcels is that without the ad farmers to balance the erosive effects of land bot runners on average market prices, the land market has tanked. And it continues to get worse, with land botters getting very arrogant in being able to frame anybody they want to get them out of their way. Recently, a former/retired ad farmer by the name of ROBO Marx was permbanned from SL for allegedly ad farming, when what he was actually doing was setting up two stores for his new tierrenters.com business. He owned less than 4,000 square meters of land in the entire grid, all in parcels of 256 square meters or larger, so he could not have had more than 32 parcels, significantly less than the 50 parcel maximum permitted under LL rules even if he was advertising on those parcels. ROBO has not been in the ad farming business in almost a year. He sold out that company, BDVR to an investor who took that company in an entirely different direction. Yet he is banned and the land bot runners were arrogantly preening about it at Jack's office hours recently. They even almost admitted to trying to take down my own web server because of my friendship with ROBO and because he lists his company at ace-exchange.com. They've used alts to slander and defame people on the ace forums. These are not people who operate ethically, they are very dirty dealers. Anybody who thinks otherwise is very badly deceived.
When I protested how ROBO was treated, the corrupt Frontier Linden returned my whole mainland build. He is now under investigation by LL for ties to the landbot runners. He is not on the governance team, and has previously been demoted for ban hammer abuse and coersion of underage residents into compromising situations.
The Reverse Donut Hole Trap
Now, here is how a land bot runner can use the 'donut hole' tactic in reverse to steal someone elses land, boost their profit on each sale by 10% or more, and get the seller banned from SL:
Picture 1: See a mild mannered ad bot runner parceling out five parcels: four 512 parcels and one 256 parcel in the middle. He has bought the land at market prices of say, 2.5L per square meter. Now he places the land around the small center parcel for sale for 2.8 L per sqm and the small center parcel for sale for 2.3 L per square meter.
Picture 2: A savvy land broker, knowing the sim is popular and residents will compete for the last sims in a parcel, buys the 256 parcel for 2.3 L per sqm and thinks he got a deal. After all, there will soon be four people with adjacent 512 parcels wanting more land once they hit their prim limit. So he prices his parcel at 5 L per sqm or more, maybe he advertises his own business there or puts up a rentable ad board.....
Picture 3: Now the landbot runner springs his trap: he joins the surrounding four parcels, making them a donut shaped parcel and sells it to an alt of his. His alt then abuse reports the center parcel owner and tells LL that the center parcel owner intentionally created the "donut hole" parcel as a form of land extortion, and the clueless and tired Linden Liason, paid a mere $10/hr by LL for his thankless job, grumbles about those damn ad farm land extortionist and seizes the land, giving it to the purported "victim", who then is able to repeat and rinse the exercise, or simply turn around and sell the land at market rates, having made a 10% profit on the parcel prior to seizure, and 10% on it on the resale. Instant 20% profit if sold in under a week, and if he's lucky, the unwitting small parcel owner gets permbanned and unable to protest his innocence. As far as the g-team is concerned, he's a dirty land extortionist, and nobody can confuse them with the facts. Easy money for the land bot runner and no living witnesses.
If the land bot runner is using the charitable tier donations of Arbor Project members to pay for their static land inventory, their profit margins can go significantly higher as they are compounded month after month, even exceeding 1000% annual profits. Perhaps the Arbor Project members should be asking their leadership where their cut of the action is?
The Legitimate Need for Advertising in Second Life
Advertising is a necessary part of Second Life, just like it is a necessary part of the internet. Advertising monetizes (i.e. makes profitable) an investment in a website or sim parcel that otherwise could not be. Why else does Linden Lab charge us to list classified ads in search? Why else do we pay LL to list our parcels in search? Because advertising is worth money and is a necessary part of any economy.
Some people will say with a straight face, "But I dont like advertising." As if saying so makes it a natural law. Most people don't like advertising, because most advertising is badly done, banal, or ugly, or they just dont like feeling like they should be buying something because they know they are very suggestible people who are easy to lead around by the nose, even for nonprofitable 'community' causes. I don't like advertising for the most part from an aesthetic view, but some advertising, both print, online and television, can be entertaining, thought provoking, or even positively motivating (the Discovery Channel's "Boom-di-yada" tv ad of last year I found to be very string pulling, as one example). However, when you get down to it, advertising makes the world go round, because it sells all the stuff that so many millions of people work so hard to produce, pays their rents/mortgages, puts food on their tables, raises their kids and sees to their retirements. I wont even call it a necessary evil, it is a necessary annoyance and sometimes a pleasing necessity at that.
Whether we enjoy advertising often is impacted by our preexisting prejudices about the companies being advertised. Fairpoint Communications, for instance, which took over Verizon's phone lines in the northeast, runs a lot of tv ads here in New Hampshire intended to make us like them but wind up annoying me because I'd so much rather they had spent those ad bucks on improving the phone lines before the blackouts last year, or put it into delivering FiOS to my rural home so I can tell Comcast to suck it. Stop talking about delivering broadband and "just do it" (ad slogan intended for ironic effect).
I had bought into LL's whole mantra that all you need is Search, that as a land baron, to keep my sims occupied, all I need to do is list my parcels for sale in the land sales part of search. My staff felt the same way and hated when I proposed spending money on other advertising channels. This past 12 months I saw my occupancy rates dwindle as my competitors got a lot more savvy about advertising. Ironically and hypocritically, many of these competitors are supporters of Arbor... However we acknowledged that we needed to advertise more, so in addition to a expensive weekly ad for our land sales office to gain us strong search placement (along with promoting profile picks and other means of boosting search rankings) we advertised in Lipstick Publishings magazines, SL-Newspaper, and now the SL Herald. Our occupancy rates have been recovering, and in the process blatantly disproving the claims of LL that all you need is search. If I could do so, I'd advertise inworld on adboard networks, but with the ban on large networks today, its really not economical.
Why Do You Care?
Some people have asked why I care so much about the goings on on the mainland. After all, I dont own much mainland myself, my business is in private sims. Why I care goes back to who I was before SL. As many people know, there was a court case here in the US called City of New London vs Kelo, in which the Supreme Court ruled that a city can seize someones private property under eminent domain and give the property to a private developer if the developer promised to expand the tax base with his development. "expanding the tax base" was seen by the radical left wing of the court as a legitimate 'public purpose' under eminent domain law. Sounds familiar eh?
As a founding member of the Free State Project, I, like many fellow Free Staters, was outraged at this blatantly tyrannical decision, totally legislating from the bench. I led a group of like minded people to propose eminent domaining the vacation estates of Justices Souter and Breyer here in NH in order to "expand the tax base". Souters home was to become the "Lost Liberty Hotel" and Breyers expansive country estate was to become "Constitution Park" with a monument to the late great and no longer recognizable US Constitution.
Amusing eh? Yes, the Secret Service thought so too.
However, it served its purpose. Souter's Republican buddies and Breyer's Democrat buddies in the NH legislature both adopted my proposed NH constitutional amendment to restrict eminent domain in NH, they did so cravenly only to protect their friends, not the rest of the people. I knew this, and that was the point of that political drama: to get them to do the right thing in spite of themselves. Our actions served as a model, and we helped get eminent domain restricted by law or constitutional amendment in over 40 states here in the US. I am very proud of our work in this movement.
Every one of my residents, and many others across SL, knows that I will always do my utmost to defend the property rights of all residents of SL. They know that as a strong, principled, and experienced Libertarian, I know what is and is not considered valid property rights under common law.
It is not a property right to be able to get government thugs to take someones land and give it to you for your own benefit, whether that goverment is the US government or the game gods of SL. Anybody who claims it is, is a fascist/socialist tyrant wannabe. If they tried that on you in the real world, in my opinion you are within your rights to use deadly force against them, especially if the state thugs fail to fulfill their sworn duty to the constitution to protect your property rights.
Doesn't matter if they are elected to congress or employed by Linden Lab, or running land bots, thieves are thieves. There is rarely any such thing as "land extortion", nobody can force you to spend Lindens you dont want to spend, and any fool can inspect a parcel for a real donut hole with two clicks of their SL viewer.
Beyond this, it simply disgusts me to see the formerly free market economy of SL be eroded and destroyed by opportunists who abuse eminent domain the same way as New London's developers and by Linden employees who have an anti-market agenda to destroy Cory Linden's vision of a truly free market. I and thousands of other business people have invested hundreds of thousands, millions of dollars into SL only to see crooks, looters and statist thugs ruin everything, frequently with LL acquescence. Those who protest this destruction come under persecution by corrupt Lindens, the governance team hasnt had any office hours in a year, and refuses to say when they will start them again. Star chamber tactics and a basic ignorance of the rule of law.
Many will say, "but SL is not a democracy" as if that makes it all ok. Actually, it doesnt. US law clearly establishes that company towns must respect the constitutional rights of residents and visitors. Even non-democracies in the world have relatively public and open systems of justice. It is really only the most totalitarian depraved tyrannies of history that keep their entire system of governance a total secret from the governed. For a company that declares itself "transparent", "open" and following a "Tao of Linden", what strange company to keep.
It is time to Free ROBO, and Free SL. If advertising wont come back, then land bot runners must go. Bring back our land values, stop trampling our rights. Give us rule of law and due process. End the reign of tyranny in SL.
Submitted by Intlibber Brautigan
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