Archive for the 'Doing Business in SL' Category

Another WSE Scandal?

It looks like the WSE is in the spotlight again, and not in a good way, again. From the sounds of it, the WSE has defaulted on a scheduled payment of the Hope Capital Bond (WSE: HCB), this payment was worth about L$650,000 of income and Midas Bank had upwards of L$3.5 million invested in the HCB, and relies on the bond payment to fund the depositor’s reserve.

Ancapistan Capital Exchange (AnCapEx) Chairman IntLibber Brautigan agreed with a statement by Midas Commons in which a boycott of the WSE was proposed until it made good on its bond payment.

“LukeConell is not a fraud or theft master,” said Smithers Daviau, a representative of the WSE present at today’s gathering. Aside from statements and excuses from Smithers and one other WSE employee, however, regard for Second Life’s oldest and arguably most opaque securities exchange was not so positive.

Commons further reported that the bank currently had around L$8 million on deposit, and a total loss of value in its HCB holdings would represent a loss of about L$5 million – and unavoidable bankruptcy for the financial institution. Source: Updated: Midas Bank in limbo; Commons and Brautigan call for boycott of WSE

From a statement on the WSE website, they say they are not responsible for the financial decisions of the Midas Bank and that the management team if fully responsible. They have delisted the following Midas Group of companies to ensure that shareholders will have the best possible chance to earn a return on their investments through capital growth and dividends using the WSE Traders Fund.

Midas Commons, CEO of Midas Bank yesterday informed the World Stock Exchange that the Midas Group of Companies are bankrupt.

The WSE accounts controlled by Midas Commons were locked while we reviewed the situation.

The cause of this bankruptcy is not our concern as the WSE is not responsible for the decisions and actions of Midas Group and its management. Midas Group and its management team are responsible for all the financial and operational decisions.

The WSE has believes that the Midas Group of Companies were Over-Leveraged and did not hold sufficient cash reserves to allow for the potential risks and impact of increased customer withdrawals, lower than expected earnings from investments along with regulatory and economic challenges. Source: Bankruptcy of Midas Group

I agree completely with Lowell Cremorne of SLOz and have asked the same question myself during the Ginko Financials fiasco.

What this latest drama reinforces is the fundamental problem with the unregulated financial system in SL - why would any serious investor look at a system where there’s no regulation and multiple stock exchanges that publicly criticize each other’s viability? One of the main value propositions of Second Life is its freedom, but this is one area where too much freedom may be one of the virtual world’s major pitfalls. Source: World Stock Exchange - the latest controversy

More coverage:

WSE announces Midas Group are bankrupt The full statement (below the fold) makes interesting reading in one paragraph saying “the reasons are not our concern” and in the next explaining why they think the bank went under. Nothing to do with late payments from their own bonds of course. The value of the various Midas Group bonds have been transferred to the WTF rescue scheme, straining it yet further.

Midas Bank the next… Looks like it is 5 to 12 to get all funds out of SL. There is no more trust left in any bank or investment….sadly I think it would be better if one starts to legally track down these individuals in RL and get that continued fraud resolved once and forever.

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Ginko Financials CEO Hits the Door

There has been so much transferring and bullshit going on with Ginko Financials, I don’t even know where to begin anymore to try to explain what happened. The most recent activity has seen the CEO say he can’t make the interest payments anymore, and he has transferred everything to the aptly named WTF, or WSE Traders Fund, and is washing his hands of it.

I also thought I could do partial liquidations and use the money to lower our debt proportionally. However, first with the ban on buying bonds for less than the face value and later with the gradual erosion of our investments, both of these things ceased to be possible and my position became even weaker than it was when I created the bonds. The
fact is, there is no way for me to meet this quarter’s interest payment. Neither of our main in-world investments got off the ground (BNT and HCL), though they may still do so sometime in the future. The stocks are too weak to be sold to help meet this quarter’s interest payment. The L$2,400,000 we have inside Allenvest, despite Allen’s lie about me having withdrawn everything, are locked and probably lost forever.

The situation is such that I am left with no choice here. The bonds need
to be converted to a fund, which will hold these assets. Namely, the WSE Traders Fund (WTF) already listed on the WSE. Interest payments are no longer part of the equation and as I am transferring the assets to Luke, I will no longer be involved with anything regarding Ginko Financial as it will no longer exist. Assets previously held by Ginko Financial are being
transferred to the WTF. Source: Ginko Perpetual Bonds Important Announcement

The SLNN in an aptly titled article, Ginko CEO Escapes, I say aptly named because it is in a folder called bank robber, check the url when you get there.

Today, Ginko Bank CEO Nicholas Portocarrero posted a statement on the World Stock Exchange Web site saying he will not be paying any interest on bonds, allowing himself a back door to escape with $750,000 USD.

But Saturday, Portocarrero said he could not pay interest on the bonds and pinned partial blame on actions taken by banker Investor Allen, and the weak face value of his bonds. Source: Ginko CEO Escapes!

There is still a little bit of hope however, as Shaun Altman, majority bondholder of Ginko Perpetual Bonds (GPB) is taking it upon himself to see to the equitable liquidation of GPB’s current asset’s and to the timely compensation of all bondholders.

I will be charging nothing for my liquidation trust service. I believe that GPB bondholders have been through enough at this point, and have a right to recover as much as they can from this fiasco. Being the person with the most GPB bonds, as well as a neutral third party to asset holders, makes me the right person to handle this liquidation. The ball is already rolling, so I ask that all bondholders recognize this, and recognize that I am working in all of our best interest. I hope that it makes you happy to know that someone is finally working in YOUR best interest for the first time in a long time. I hope that I will be able to recover a sizable portion of GPB’s assets for distribution to all of us, but I can’t make any promises. Source: Ginko Perpetual Bond Liquidation Plan

Check that post for the exact way he plans to carry out the liquidation and distribution of the GPB assets. Let his be a lesson for everyone, if the bank is not backed by money to start with, then you are gambling with your lindens and we know how the Lindens feel about gambling.

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OnRez Browser and It’s Affect on the SL Economy

October 19th, 2007 | Category: Business, Doing Business in SL, Tier Fees, Virtual Economy

By Stone Culdesac

In a recent post on theGridLive, Prokofy, from the Second Thoughts blog, chastised me for not asking any questions about the new OnRez browser the Electric Sheep Company is creating, because she says they are going to change search for everyone who uses it. I didn’t really get what she was so upset about until her most recent post in which she says the search function in the OnRez browser will be the same as searching from the ALL tab in the Second Life client, which, as we all know, sucks. If there is no way to narrow it down to people, places, events, etc, then it will always suck and new residents will get tired of it and move on like they do now with the regular client. And if the shopping search is like the shop.onrez.com site, then people won’t be happy with it either, as they haven’t figured out what most online merchants already know, you show each item and allow them to pick a color on the item page, instead, they list each color in the search so you end up with results that are all identical except for the color, and that is not very useful at all to anyone that I know. If they want a real shopping destination, then they need to use their own site and figure out what is wrong with it.

But I guess the main thing with this new browser will be how it actually handles search, if it is as Prokofy says, then it will suck for the new users to search for anything in Second Life even worse than it does now with the regular client. As one merchant in the comments said, about two thirds of their traffic comes from search, most of the rest is word of mouth with some classified ads and other listings sending very few visitors. This could be big for Second Life merchants and it will be one of the first things many of us will be looking at when the browser is available, I will show some side by side comparisons and talk to some merchants to see if they see any increases in traffic on the 24th and thereafter.

Check out Prokofy’s post, What’s Wrong with the Sheep Search and the Killing of the Inworld Economy, as she goes really deep into the reasoning on why Linden Labs would allow ESC to do what they are doing, and some of the happenings behind the scenes. One of her more interesting points is the fact that prices on some things have increased 10 fold, but the value of the linden has remained the same and does not gravitate to it’s natual value, she says, “That most of these people then are facing depressed wages and an economic slump and a world awash with freebies and tombstone objects from oldbies, and frustrated in entering the market, and then leave and never make the middle class, is a subject Lindens or corporations or their metaversals never contemplate.”

She has several related articles, this one, Do You Need Real Estate to Make a World? talks about how open sourcing the server code will devalue the land, and a couple more on the Electric Sheep company and the search function in the OnRez browser, Don’t Buy Classifieds or Search Ads This Week! and Greed Shepherd’s Big Fleece: The Sheep Grab the Search.

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Promoting Your Profession & Your Programs in Second Life

October 13th, 2007 | Category: Business, Doing Business in SL, Promotions

Promoting Your Profession & Your Programs in Second Life

When: Oct 13, 2007 2:00 pm - 3:00 pm (Saturday)

Where: Eduisland II Second Life

Tags: fair festivals fair festivals parades learning profession programs

Description: Eduisland II Education Fair

Location at Occupational Therapy Center with Zsuzsa Tomsen “Promoting Your Profession/Your Programs in Second Life” This session covers how set up an educational center and promote a project on Second Life. This includes how to create and set up informational displays, how to create and run video, and how to build and modify objects that will enhance your center. We will also discuss ideas for “getting the word out” in Second Life. Sandbox Hands-on.

Second Life URL.

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No New Taxes on Virtual World Earnings….Yet

October 09th, 2007 | Category: Doing Business in SL, Taxes

In yesterdays Metanomics session with Dan Miller, Dan said that Congress is not looking to impose taxes on virtual earnings, and he said that they would thrive and develop without taxes, which echoed what Jim Saxton said last year when he said taxing virtual economies would be a mistake.

The senior economist for Congress’ Joint Economic Committee sent a few signals about the its long-awaited report on virtual world taxation in a Second Life appearance on Monday.

“We are not looking to impose taxes,” Miller told a packed house at the Metanomics session. “In my opinion the less government regulation you have on virtual worlds, the more they’ll thrive and develop.”

Miller’s statement echoed the position of committee’s then-chairman, Rep. Jim Saxton (R-NJ), who said last year that taxing virtual economies “would be a mistake.” Source: Congress to Second Life: No new taxes?

But, he did say, the final word on taxing virtual worlds like Second Life may not come from Congress, but from the IRS who could decide that even though the money may not be “real” it could be considered a barter exchange and taxable under IRS topic 420.

If you missed it, like me, you can view the archived video at Playing Metanomics :: US Congress Looks at the Metaverse on the Second Life Cable Network. The folks at metaversed will also be uploading to blip.tv here soon, so check there as well.

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Should You Buy Land in Second Life?

October 01st, 2007 | Category: Doing Business in SL, Investing, Land Issues

I recently purchased a nice plot of land in Kidoko West, owned by Doeko Cassidy of slnn.com fame, when I bought it, I thought I was getting a pretty good deal, the person I knew had purchased it for 65,000 lindens and was selling it to me for 40,000 lindens because she was buying some other land. I figured I could hang there for awhile and then flip it and make a few lindens, whatever, I considered it an experiment, so it didn’t really matter. I had no idea at the time what I was getting into exactly, so hopefully this post will help some of you in Second Life, as it has been a learning experience for me.

Wouldn’t you know it though, this wasn’t even a month after the gambling shutdown, before the whole Ginko Financials thing happened, so, land prices dropped some and there was more and more land available, further dropping prices. As a matter of fact, the price of land has been dropping all year long, this month so far the average price per meter is 6.4813, at this time, last month it was 7.0839 per meter, in June it averaged 8.5869, in May 9.1649, in March it was 10.63 a meter, in February it was 11.29, and in January of this year it was 12.20 lindens per meter. The price is almost half of what it used to be, so, I guess right now it is a buyers market. The total number of residents with land for sale in January was 2,849 residents selling 12,894 parcels totaling 8,313,696 square meters for sale. This month there are 7,444 residents with land for sale, about triple January’s numbers, selling 44,881 parcels, little over triple January’s numbers, totaling 29,964,256 square meters for sale, or almost four times January’s numbers.

But, should you buy land, or should you just rent it? Going by those numbers, you should probably wait until the prices bottom out before you consider buying. What exactly is the advantage to buying a parcel of land from someone who owns the Island, or sim? If anyone has any, please leave a comment, because, right now, all I know are reasons not to buy land.

What is the advantage of renting over buying land? Well, the main thing to me is you can’t get screwed out of your investment, because you don’t have that big payment up front when you just rent it, if you get kicked out for some reason. As an example, in my case, I paid 40,000 lindens for the land, thinking I could sell it and make a little when I did, but I still had to pay 2,128 lindens a week for the tier fees, which is more than I was paying in rent for the place I was already “living in”. Now, I had a lot more prims available on the land that I “purchased”, but, all I used them for was stuff I didn’t need, but that is one plus for buying. Using Kidoko West as an example, the covenant states that when the timer hits 0, they can reclaim your land and are then free to resell it or rent it.

When I first bought it, I asked if the tier fees were monthly, the lady I bought it from said yes, so, it was surprising to me when the fees came due again a few days after buying it. I even waited a few days because I im’ed Doeko to see what the deal was, so the very first week I was a few days late because I was thinking I shouldn’t have to pay them yet. I received no response from Doeko, and everyday I received this message that said I was late pay to avoid eviction, so, I ended up figuring it out after reading the covenant again, it said the fees were weekly, so I went ahead and paid them, and started thinking about whether I should get rid of it or not, as it was going to cost me more than my current rent, when I thought it would be cheaper and eventually pay itself off. Again, this part is my fault, I did not read the covenant thoroughly, there must’ve been some confusion between the seller and I on the tier fee’s, and I did not have the proper knowledge going in to know exactly what to check and what my rights were.

At this point, I was a few days late, and saw no ill affects other than the daily message about it being late, in fact, I saw several different plots that had been expired for two weeks, and others that I have talked to said the same thing, and I kind of figured I would get some kind of final notice before they actually reclaimed it. Nope.

So here I am holding my virtual dick in my hand with no recourse, I just loose the $180 some dollars, or $40,000 some odd thousand lindens I paid for it. Legal, yes, good business? I wouldn’t think so, if you truly want to pay the monthly tier fees, you would think they would want to keep on getting their weekly payments from users such as my self. Ethical? I don’t think so, I asked to get the land back or for some kind of refund, there are no refunds, you should’ve paid Doeko said, I still can, but it is already listed for sale again, which is probably the whole point. This sim has probably paid for itself many times, I just wonder how many times some of these plots have been reclaimed and sold by them. Certainly isn’t a very neighborly practice, like they claim they are in the covenant.

If you want to live in Kidoko West, or anything owned by Doeko Cassidy, I recommend you rent and avoid all the chances of losing your “investment”.

For everyone that will say this is just sour grapes and I should’ve known exactly how this stuff works, you are right, I am just trying to prevent other people from doing the same thing and hopefully, helping you save your lindens.

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Second Life Avatar Gets VC Funding

September 13th, 2007 | Category: Business, Doing Business in SL, VC Funding

Everybody remembers Anshe Chung right? She is the first person to make a million off of Second Life, or so it was reported. Well now she has received a round of VC funding from Gladwyne Partners, who also invested in the Electric Sheep Company, creators of sims for the NBA, MLB, AOL, Reuters, NBC, the Virtual Laguna Beach & Virtual Hills, The L Word, Bantam Dell, Ben & Jerry’s and even some travel and real estate firms.

Anshe Chung Studios maintains offices in the real world where it employs more than 60 people full time, I believe in China where most of their employees are from, and they also use virtual reality freelancers world wide. They host thousands of residents on more than 40 square kilometers of gated communities, and according to Anshe Chung Studios, they have developed more virtual property than any other Metaverse development company.

Sources at Gladwyne tell 3pointD the investment closed today, but wouldn’t reveal the amount. Gladwyne should be quite happy to have found another play in the virtual world sector; they’ve been looking very closely at the space since hopping into the Sheep pen. From the sound of things, they’re continuing the due diligence they’ve been doing throughout the space for the last year or two, so look for more, although it remains to be seen how soon. And congratulations to Anshe (or rather, to the husband-and-wife team behind the avatar), who has built an unparalleled “native” virtual-world brand over the last four years or so. Such companies should be under pressure from bigger, more established production houses, but none seem to have made significant in-roads. Anshe also has the advantage of having outsourced much of her studio’s work to employees in her native China, which may have made a difference to Gladwyne. Source: Anshe Chung Draws Venture Capital Investment

Will ACS end up being the Wal-Mart of Second Life? Driving out smaller businesses and later raises prices as they have been accused of doing? If you look at all the stink she raised recently when she dropped the prices on everything to 10 lindens, I think she may be headed in that direction. Rumors of shady deals on investments on WSE, and converting the land she is renting, etc, as noted by Nobody Fugazi here certainly don’t make me feel all warm and fuzzy about ACS. Even Benjamin Duranske of Virtuallyblind.com has been looking into the legal aspects of it.

Other links covering some of their business practices below:

10Lindens ACS - Anybody pro? Yesterday Anshe Chung’s company flooded SLexchange with cheap furniture: 10 L$ / item and - because of her ’silent’ partnership with SLexchange - got her own category do to so right under ‘vehicules’. Well, it didn’t take long for a protest to arise on the SLexchange forums, understandable too as Anshe is planning to launch ‘a full range catalog of decent SL content’ at this price. For full time SL entrepreneurs that are into the content creating business, this is bad news: imagine a skin selling at 10L$.

Vehicles (2473), Weapons (2566), Anshe Chung 10Lindens People complaining about her getting her own category to flood slexchange with the cheap stuff. Heck, check out this deal on a Sex Bed</a. for only 10 lindens. I believe I paid a few thousand lindens for mine.

STOP 10Lindens They are even selling t-shirts to get the everything for 10 lindens stopped.

Stop 10 Lindens

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Coke, Branding and Second Life

August 27th, 2007 | Category: Branding, Doing Business in SL

As has been said on many blogs, including this one, you have to become part of the Second Life community to get people interested in what you are doing, you can just create a sim and say here it is. Coke is one of those brands who gets it, as they have been involved in the SL community since they first entered Second Life and will continue to do so. As the gentleman mentioned in the post I reference below, Coke advertising and branding is no longer about selling Coke, it is about becoming part of people’s, or avatar’s, lives, as there is no real way, currently, for them to track if a campaign has sold more cans of Coke or not.

The story below is from a panel at the 2007 Second Life Community Convention, the panel included Mike Donnelly, Director of Global Interactive Marketing at Coke spoke on a panel with C.C. Chapman and Steve Coulson from Crayon about Coca-Cola’s Virtual Thirst contest in Second Life, where users where challenged to create a Coke machine for Second Life, a tough project considering that the avatars do not need to eat or drink. The winner has not yet has been announced, btw, see below.

“Coke was in Second Life prior to us actually entering SL,” said Donnelly, referring to coke machines fans were making and putting in the world. Taking what the fans were doing to the next level, Crayon and Coke developed a contest to make a vending machine, with the idea that SL residents are thirsty for experience. Of course, avatars don’t have physical needs like eating and drinking, but by taking the brand value of coke and appropriately translating it into a virtual world, Crayon and Coke created an appropriate, successful campaign. To be clear, I’m not saying they were successful, Donnelly the client said the campaign was successful based upon the criteria they set for themselves.

“As the #1 brand in the world, I can’t play around too much,” said Donnelly, referring to the fact that he needed to provide real marketing value with Coke’s Virtual Thirst. To do so, they tracked the social media around the initiative. Donnelly said that all marketing ultimately is about selling more Coke, but for this effort, the measures were about branding. In other words, they didn’t measure an up tick in sales, they looked at metrics around participation and community reach. The results were:
- 300 blog posts about the contest
- 33,000 links
- 150+ photos in Flicker
- 31,000 Youtube views with 160,000+ comments.

Donnelly said he was pleased with the results and will continue to participate in SL as part of an integrated marketing plan, meaning, participation in Second Life is not enough, it needs to be part of larger strategy in order to be successful. Indeed, the contest itself recognized that limiting entries to builds in Second Life would exclude some people, so they allowed contestants to enter anything: emails, hand drawn sketches, storyboards, etc. The thing they wanted was the idea, in any form. Source: Coke Comes Clean about Second Life

Donnelly concluded with a number of lessons learned from the experience:

  • Listen to the community. Do not talk at customers.

  • Partner with pros.
  • It’s about community, not location.
  • Embrace your critics and learn from them. (”I’d rather have critics talk about me than no one talking about me.” Donnelly increased the prize money after people criticized the contest for having too small a pot.)
  • Maximize success, use multiple channels.
  • Strike a balance between art and science.

Added: C.C. Chapman pointed out that the winner had been announced on the Virtual Thirst competition, they just have not yet released the final product, the winner is named below.

As one of the project leads I’m VERY excited to announce that we have a winner in the Virtual Thirst contest and her name is Ann Marie Mathis aka Emerie May in Second Life.

Not only did she submit the winning idea, but she also went and took several photos of herself for bloggers to use in their posts. The one above is one that I found on her Flickr stream and got a big kick out of it. The fact that she took the time to take photos gave me a big smile! I was going to ask if I could take some of her and she beat me to it!

In the very near future she will travel to California to work with Millions of Us on making her idea a reality. We can’t wait to share some of that with you in the future! Source: Virtual Thirst Has a Winner

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Five Rules to Help Your Business in Second Life

August 21st, 2007 | Category: Business, Doing Business in SL

This is a good little article from InformationWeek that sums up what most residents have always said about doing business in Second Life, you have to interact with the community, get involved, you can’t just through up all of your information and what for avatars to wonder into it. You have to create a community and be involved, they give Cisco as an example. When they first created their islands, they built all kinds of static displays where people could grab their content and learn about their products and offerings, and, of course, no one was interested in that. Now, they have rebuilt and made it meeting rooms and coffee shops where they hold weekly tech chats and more, they even hold interviews there now and have gone from one amphitheater to three, because of the number of meetings and such going on there now.

InformationWeek has been doing business in Second Life for seven months. Our sister publication, Dr. Dobb’s Journal, has been doing business in Second Life since October. And we’ve spent a lot of time talking to the business leaders of Second Life.
One thing we’ve learned: When doing business in Second Life, you can’t just lecture people with your marketing message. You have to connect with them. Engage.

Cisco Systems(CSCO) has a big presence in Second Life, including a recent forum on mobility solutions.

“If you want to avoid people, get on the World Wide Web. That’s solitary,” said Christian Renaud, chief architect of networked virtual environments for Cisco, who heads up that company’s virtual worlds strategy. “If you want to interact with people, go into Second Life.” Source: Five Rules For Bringing Your Real-Life Business Into Second Life

Build a community, get involved with it, and they will come.

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Atlas Venture Capital Selling MasterCard Debit Cards

August 21st, 2007 | Category: Banking, Credit Cards, Debit Cards, Doing Business in SL

I mentioned yesterday over on the Grid Live that Perfect Card will be offering a Second Life Debit Card, well, it looks like that might not be the only one available.

08.17.07 - “The Bank” Now Selling MasterCard

The bank has now deployed new ATM machines in all bank locations. The new ATM machines will now allow you to buy a MasterCard Debit Card. This is a real life MasterCard, that you can use anywhere MasterCard is accepted worldwide.

The cards are sold with some pre loaded USD funds on the card. The options are $10, $20, $50 and $100 USD. The cards can be re-loaded with L$ from any of The Bank ATM machines. The L$ will be converted to USD at the posted daily exchange rates.

After all costs and postage for the card, Atlas Venture Capital expects to see 3000 L$ per card profit. This income will be used to cover some operational expenses, then the balance will be issued as a dividend to all active AVC shareholders.

Our goal is to sell 1,000 cards in the next 2 weeks. Then over the month of sept we hope to sell 10,000 more cards.

We hope to earn over 30 million L$ in the next 30 days, with this new program. Source: 08.17.07 - “The Bank” Now Selling MasterCard

Wow, they expect to earn of over 30 million lindens? I guess they expect most avatars in Second Life have no idea of all of the troubles with finance that have been occurring lately, and that may well be true. I will buy one just to see what it looks like and how it goes, but I doubt I use it to buy anything more than getting my 10 bucks back.

Someone needs to tell these people to spell check their press releases before posting.

Added: Just saw this linked to on Your 2nd Place, AVC had just recently acquired The Bank, referred to in the above story, and this article adds a little to the story.

The Bank is also announcing a new and innovative service to The Bank customers. World Wide Connect, owned by Lonnie Dagger, has also been purchased by Atlas Venture Capital to provide a MasterCard debit card service to all of The Bank customers. This card will enable people to deposit money into their debit accounts which can then be used with a real life MasterCard to buy lunch, or whatever else they desire, in the real world. There will be no transactions fees for this service, which is bonded by Lloyds of London. This is a first for Second Life and will really change the face of banking in the metaverse.

“These two acquisitions for Atlas Venture Capital will make the Bank a market leader in the finance community. No one else has tried to implement such a service to SL residents before, and it opens the door to an increased cross over between SL and real life, offering an additional portal for the withdrawal and deposit of funds into and from hard cash,” say Jasper Tizzy, CEO of Atlas Venture Capital. Source: Atlas Venture Capital acquires “The Bank”

Nobody Fugazi has sent a question asking Lloyds of London if they are indeed bonding this debit card for them, if so, it would certainly change my opinion of whether this card will be usable for me or not.

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Ginko Financial Ceases Operations

August 10th, 2007 | Category: Banking, Doing Business in SL, Investing, Scam

Ginko Financial DOSL (Dead on Second Life) as of August 8th at 7:30 pm sl time. Lots of coverage online.

Jitters in Second Life as bank shuts doors The biggest bank in the virtual world of Second Life has closed its doors after a run on its deposits, putting at risk hundred of thousands of real dollars of savings and investments.

On Thursday, Ginko Financial - which is owned by Brazilian from Sao Paulo whose real name is Andre Sanchez - stopped accepting deposits, froze all withdrawals and converted account holders’ balances into “tradeable debt securities” called Ginko Perpetual Bonds.

Unable to pay depositors, Ginko ceases banking operations “Customers will receive one bond with a face value of L$1 for every L$1 they have deposited in Ginko Financial,” said Chief Executive Nicholas Portocarrero (real life: Andre Sanchez of San Paolo, Brazil) in a statement. “Each Ginko Perpetual Bond will yield L$0.03 or 3% of face value per quarter.”

The security was trading at about a quarter of its face value at 7:20 am Pacific on Thursday. When the bank ceased operations, it had about L$50,000,000 queued up for withdrawal.

Ginko Financial finally dead Nicholas Porocarrero finishes the letter with the comment:
“Ginko Financial will bounce back from this and if you stick with us, you wll not lose anything. If you must sell the bonds, then you must sell, but I advise against accepting low prices.”

Whilst I continue to maintain you should make your own choices about what you do with your own money, I’ve been fairly forthright in my attitude towards stock exchanges, so whilst I continue to wish Nicholas all the best, I, for one, will be selling, and if it hurts my pocket, well so be it.

Serious Questions: WSE and Ginko Financial Before the Ginko Financial uproar which has taken the spotlight - even with it closed - I was focusing on the World Stock Exchange (WSE) and some of the problems related to it. Oddly enough, the involuntary transfer of Ginko’s clients assets into Ginko Perpetual Bonds has gotten me right back where I started. Further, after I pulled investment from WSE - Ginko, which is linked to the WSE through Hope Capital, tossed me right back. Well, here I am - about $183,300L of me. And I’m small potatoes - some of the numbers I’ve had people confide in me are certainly worth a few calls to a lawyer.

Making Second Life More Viable for Investment As I wrote before, the community needs to take steps forward. These steps, as I wrote, include these demands:

  • We want better investment or we will not invest.

  • We want more transparency or we will not invest.
  • We want more realistic expectations on our investments
  • We want better policy from Linden Lab when it comes to these things.

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Doing Business in Second Life

August 07th, 2007 | Category: Business, Doing Business in SL, IBM

This looks really interesting, Meet Me in My Avatar’s Office: Doing Business In Second Life on Friday August 10 @ 5 pm sl. The speaker is Doug Mandelbrot, executive research consultant at IBM’s Academy of Technology.

Are you interested in where the future of virtual business is headed? Are you familiar with Second Life? If so, then go to Info Island I at the Open Air Auditorium for “Meet Me in My Avatar’s Office: Doing Business In Second Life” on Friday August 10 @ 5 pm sl. The speaker is Doug Mandelbrot (Doug McDavid in real life) and the executive consultant with IBM’s Global Business Services and the Almaden Research Lab. Doug is a firm believer that the 3D Internet, as exemplified by Second Life, is the future environment for all forms of remote collaboration within and among teams of people. He will discuss a convergence of historical economic and technological trends that make a move into the virtual world simply inevitable. He will introduce the audience to the range of virtual world activities that IBM is currently involved in, including their relationship with the New Media Consortium. Source: Doing Business in Second Life

News.com has more:

IBM certainly has a growing stake in the future of those online spaces. Evidence of the software giant’s commitment to R&D for virtual worlds came this week when it announced a new social-networking tool for the enterprise. Called Lotus Connections and expected out later this year, it aims to help people find colleagues of similar interests, among other things, in virtual worlds.

Still, audience members at Monday’s event expressed doubts that the corporate world, or the general public for that matter, was ready for a virtual space in which co-workers’ avatars, or digital self-representations, could be naked versions of themselves.

“The only thing that matters is what consumers are ready for,” one audience member said. Source: Meet me in my avatar’s office

I’ll post the Second Life URL as soon as I find it, stupid search.

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