Linden Lab Acquired by Investors

Linden Lab Acquired by Investors After Months of Rumors, Layoffs & Sansar’s Sale; Second Life to Still Expand, Official Announcement Promises


I’ve heard rumors by various insiders that Linden Lab was looking to be acquired for the last few months, and now that prim-based shoe has finally dropped:

 Linden Research, Inc. announced today it signed an agreement to be acquired by an investment group led by Randy Waterfield and Brad Oberwager. Closing of the acquisition is subject to regulatory approval by financial regulators in the U.S. related to Tilia Inc.’s status as a licensed money transmitter as well as other customary closing conditions. Upon closing, Mr. Waterfield and Mr. Oberwager will join the Board of Directors of Linden Research, Inc.

This announcement follows fast upon the recent acquisition (in March) of Linden Lab property Sansar by a little known turnkey operation called Wookey. In fact, that’s when I heard rumors of Linden’s coming acquisition — just as I did when Linden Lab made a round of layoffs last February. In retrospect, both moves appear to be in preparation for this purchase.

However, the overall gist of this announcement is very much: Don’t worry, Second Life will continue and grow. Which may or may not be true, but that’s definitely the intended theme:

“We’re excited for this new chapter to begin. We see this as an opportunity to continue growth and expansion for Second Life and our money services business Tilia,” says Linden Lab CEO Ebbe Altberg. “We’re grateful for the ongoing support from our community, business partners and investors. Now more than ever, there is increased recognition of the value and utility of virtual worlds to bring people together for safe, shared, and social online experiences.”

“Both the company and its virtual world community have a unique culture and creative energy that remain important to the long-term success of Second Life,” says Brad Oberwager. “There’s a bright future for both Second Life and Tilia and we’re excited to help fuel these growth opportunities.”

“Since its inception 17 years ago, Second Life has been a pioneer in the concepts of virtual societies, land and economies,” says Second Life founder Philip Rosedale, who is now CEO of High Fidelity. “I’ve known Brad for 14 years personally and professionally, and I’m confident he will bring his passion and proven strategies to help Linden Lab achieve new heights in distribution, scale, and quality while remaining true to the original vision, creativity, and community that makes Second Life unique and special.”

Read the rest here. As with the corporate executives of Wookey, neither Oberwager or Waterfield have any apparent experience in game development, so it’s unclear as yet how they plan to implement the “bright future” the announcement speaks of.

I have of course reached out to Linden Lab about this, and hope to update this post soon.

Update, 3:50pm:  As a possible hint of Linden Lab’s future, Randy Waterfield is the Chairman and CEO of the Waterfield Group, which has this its business mission:

The Waterfield Private Equity Fund(s) I, II, & III; as well as The Waterfield Family Office, invest in conservatively run companies with strong free cash flow, proven management, and a platform we believe can add value to the global economic community. We prefer basic businesses with a few years of proven, conservative growth. We avoid companies that are growing too fast. We believe slow and steady makes the race… We strive to be a good partner to existing management, are passive with regards to general managerial issues, and work hard to help our CEOs and their families’ realize their vision. We have no defined exit plan, and tend to own companies for generations. 

I.E., translating the business speak: We buy companies that make a decent profit and help keep them running for years and years, and that’s basically it.

So I’d speculate — and this is only my speculation — that Linden Lab’s original investors pushed for this acquisition to finally have Linden’s long-awaited liquidity event. I.E., “We invested in you over 15 years ago, you’ve been profitable for about 13 years, so now where’s the return on our fricking investment already?”

Have a good week from all of us at Zoha Islands and Fruit Islands