Second Life Needs More Payment Methods

From; "Second Life users spending more time in world, but are they paying?
Cyndy Aleo-Carreira 07.01.2008"; Wagner James Au found some interesting Second Life data points buried in Linden Lab's economic statistics for the virtual world, where users find information from the financial state of the company to exchange rates for in-world currency. In the numbers, the average price for land shares in Second Life dropped from 3.23 Linden dollars (L$) to 2.86 L$ per acre. But an even greater concern for Linden Lab is the ratio of user hours to premium subscribers. Paid subscribers (those who pay a monthly fee for the privilege of spending more money on land rights) have been on a steady decline since December 2007, while the total number of hours users spend in-world has been on a steady upswing over the same period. It doesn't take Alan Greenspan to know that a larger user base spending more hours in-world without paying for the privilege isn't a trend Linden Lab wants to see, which might be why there has been no announcement on their blog of the latest figures. Linden Lab can always hope that some of those non-paying users convert to premium subscribers, but with the U.S. (Second Life's largest user base, with almost 37% of total accounts) economy sagging, spending money on a virtual life may take a back seat to the real one."

Bottom Line: Linden Lab is not monetizing the international non-credit card-using markets with alternative payment methods like online banking, prepaid cards, telco billing and sms. If Linden moved beyond credit cards the SL Resident L$ buyng % would rise and there would be more premium subscribers who would opt for premium accounts rather than the occasional and infrequent L$ purchases (from 3rd party Lindex vendors who do provide alternative payment methods). http://www.thestandard.com/news/2008/07/01/second-life-users-spending-more-time-world

Apaja Co-operates With Sulake - Prelude to PlayRay Becoming Part of Sulake Inc?

From Asmo Halinen's blog about "Co-operation with Sulake June 28, 2008 – 11:22 pm;
We have just started an interesting co-operation together with Sulake and its social networking service IRC-Galleria. Part of Aapeli’s online gaming catalogue is now accessible straight from IRC-Galleria as well. The players from IRC-Galleria and from Aapeli end up in the same gaming space, with IRC-Galleria based users marked with their own unique G-icon in the gaming lobbies. The collaboration has received a good acceptance from the users and we already have some preliminary plans how to enhance this thing further."

PaymentGuy has heard from insiders Apaja has been looking to shop itself to Sulake for some time now. Maybe this is the first step towards an aquisition - feeling each other out. Sulake, following its bizarre IRC Galleria acquisition, could use a property like Apaja's Playray to boost its portfolio and achieve its goal of an mmog / virtual world publisher. Apaja management is no doubt drooling at the possibility of a Sulake IPO - that has been promised every year for the last 4 years now so we will see - meaning they are likely willing to accept Sulake shares for Playray like the IRC team did rather than cash.

So, the good and bad. GOOD thing is Playray is more compatable to HABBO than IRC. The bad, 1. Sulake's all-Finn management seems to have trouble working with non-Finnish partners or making non-Finnish title / property acquisitions, and 2. it is still an open question whether 3 Finnish small fry can create an industry big fish success like Penguin or Webkinz. Interesting anyway. Stay tuned ...

Merchant Accounts

Every business small, medium or large needs a merchant account. Today, it really doesn’t matter what your individual business is, if you are in retail or even low volume wholesale, then you can enjoy increased profits from the ability to accept credit cards. Markets change, however they may grow, and the internet has been hailed as the biggest contributor to their expansion. To say that the success that credit card processors and banks have had a fair shot at traditional, brick and mortar businesses is a fair assumption based on the thirty years that credit card processing has been available to businesses in the United States. The internet has made the transition for those businesses as well as new internet based businesses to thrive in international markets. Whether your business is product or service based, there is a market; in fact, some industries rely on the internet for their entire market. These types of businesses have bridged gaps between international and domestic business in that they have forced consumers to cross borders for their products and services.

The unfortunate reality of ecommerce is that while the businesses may be completely legitimate, they pay rates generally reserved for truly high risk businesses by banks and processors, daily. Domestic banks see ecommerce as high risk; their customers, a mystery and the business transcendent. The regulations that rule and preside over merchants and their credit card processing capabilities are antiquated to say the least. To say more is not necessary. Merchants have found ways to keep their processing fees low, or lower than traditional methods. Just as the internet brought together merchants and their customers, it has connected the very same merchants with international banks and processors that offer competitive rates while letting them enjoy higher volume limits and less restrictive regulations. Merchant service providers are a great resource when it comes to acquiring an international merchant account. Unlike many domestic banks and processors, they foster many relationships with banks worldwide with the ultimate goal of successful integration for each and every business that shows interest in their processing solutions. One of the keys to their success is no secret. With that much versatility, merchants can actually have a custom tailored credit card processing solution just for their business. They can offer full integration with the processor through them within seven days and services such as virtual terminals, third party fraud scrubbing, 3D secure processing and real-time reporting. With so many options out there, it will benefit the merchant the most by contacting a few merchant service providers and choosing the one that best fits your business and works within a time zone that you can live with. Another factor that separates certain brokers from others is that some specialize in certain industries and even businesses. For specialized industries, finding a merchant service provider that works your busy hours, can identify, help resolve and even protect your business against chargeback’s is one of the greatest assets you can have as a merchant.

PayPal closes the border

When Peter Thiel launched PayPal a decade ago, he had a vision of a global payments mechanism which would accelerate the withering-away of the nation-state. And then he sold it to eBay. eBay's latest failure to transform the international monetary system is quite literal; for almost two weeks, PayPal has had a bug which prevents it from collecting cross-border payments for subscriptions — this while its new president, Scott Thompson, has been touring the globe. The error: a bit of code in a drop-down menu. Subscriptions are a small part of PayPal's business, though vital to the complaint-prone blogging class. Regardless, it's a trivial bug that should have taken minutes, not weeks, to fix; that eBay has not yet done so would seem to speak to a profound rot in its technical organization — which Thompson headed up as CTO before his promotion.

ex-Linden CTO Corey Ondrejka Gets a New Gig ...

From Corey's blog it seems he is recharging his batteries before starting a new job. Will be very interesting to see where this virtual world guru goes next after building Second Life; http://ondrejka.blogspot.com/

been off the grid a bit

Apologies for recent lack of posting. I owe a serious recap of my semester at APOC, but that isn't going to happen right now. I've been enjoying two weeks mostly off the grid, hanging out at home, teaching my daughter to swim, and learning that my wife consistently kicks my ass at Boom Blox. It's been most excellent and not at all conducive to blogging. It has also been the perfect recharge before starting my next gig. Details to come.

How Underwhelming ...

Millions of Us Hires Brian Dunbar as EVP, Client Services

Millions of Us announced today that it had hired Brian Dunbar, formerly an Associate Partner and Group Account Director at Goodby Silverstein & Partners, as the new Executive Vice President, Client Services. Dunbar has worked with brands like American Airlines, E*TRADE, eBay, Saturn, Adobe, Frito Lay, and Budweiser as well as the city of San Francisco to promote the volunteer program SF Connect. "Social media and virtual worlds are growing exponentially and are creating a huge opportunity for marketers. Millions of Us is quickly establishing itself as a leader in this new marketing frontier and I am tremendously excited to join their leadership team," Dunbar said in a statement.

M-payments to reach 100 million users by 2011

A report predicts that the number of people making mobile payments around the world will rise to 103,9 million in 2011, from 32,9 million in 2008. SMS and 0900 payments will continue to drive mobile payments even though the adoption of wireless application protocol (WAP), unstructured supplementary service data (USSD) and near field communication (NFC) contactless services will grow, the study suggests. The report indicates that banks have less chances than mobile operators when it comes to obtaining the greatest possible profits from m-payments. Researchers say banks can ‘justify the investment if they look at mobile as an extension of their existing channels and bundle payments with additional banking services’. The report warns that banks may be hit by offerings from Obopay and PayPal. Moreover, m-payments services provided by non financial institutions may threaten the card business, researchers suggest. Researchers point out that m-payments services have chances to succeed in developing markets where many people are unbanked and where there payment options are scarce. In developed markets, the service is set to become just an extension of existing options.

Asia Pacific will continue to lead the way on mobile payments in the near future, mainly due to the continuous rise in the adoption of the service in massive markets in India and China. Western Europe and North America lag behind because of a more established payments infrastructure and greater concern over security. Currently, Asia Pacific has 85 percent of the mobile payments market, with a projected 28 million users in 2008. Western Europe is expected to have 499,000 users in 2008, while North America is projected to have 1 million users. The report indicates that NFC-based contactless technology can have success in Western Europe and North America because of the convenience it offers and to the ‘cool factor’. The report was published by research firm Gartner.

PayPal and Sprint team on P2P mobile payments

PayPal has partnered US wireless operator Sprint to offer its person-to-person services via the telco's new downloadable mobile wallet.´ Sprint subscribers with a PayPal account can send money to anyone in the world with a mobile phone number or e-mail address through the MyMoneyManager application. The recipient gets a text message to let them know money has been sent to them. The Sprint application - which is also being used by BB&T and IBC Bank - was developed by California-based mobile banking outfit mFoundry. PayPal launched a text based mobile payments service in 2006, enabling registered users to make person-to-person fund transfers or pay for purchases via their handset.

This was followed up last year by Mobile Checkout which lets customers make purchases from online merchants using the mobile Web. Person-to-person mobile payments is an increasingly important market. Earlier this year PayPal rival Obopay launched a service to let US customers transfer money from their account to non-Obopay users. But the big market for peer-to-peer transfers could come from remittances. Western Union has teamed with GSMA - an international trade group of mobile phone operators - to develop the commercial and technical specifications for connecting mobile operators to its money transfer network.
http://www.finextra.com/fullstory.asp?id=18387

Inside APAJA

Ever wonder what it looks like inside of one of Finland's leading casual game studios? http://www.flickr.com/photos/asmunder/2435572213/

ClickandBuy President of North America Lance Devin Quits and Returns to Billing Solutions Group

Yet another negative development at ClickandBuy, recently, Lance Devin has left as President of ClickandBuy North America after 10 months to return to BSG.

ClickandBuy CTO Fabien Siegel Quits

In another sign of turmoil at ClickandBuy, its CTO Fabien Siegel, the technical innovator behind ClickandBuy's payment infrastructure has left the company.

ClickandBuy CEO Norbert Stangl Resigns

ClickandBuy's troubles continue forcing the Founder and acting CEO Norbert Stangl to step aside "Stangl and the investors of Firstgate have agreed upon a new management structure.
Mr. Stangl remains president of the shareholders meeting. The appointement of a new CEO will take place soon. Untill then a interim CEO from ALIXPartners assume this role. That`s all to strenghten the position of the company and to gain further growth... the rest of the blah blah blah in German http://www.presseecho.de/wirtschaft/NA3731175350.htm

Bad weather, oppressive regimes, poor economic conditions -- that's what makes an SL user

Philip actually said this; ""The only thing that SL users have in common is that they have a lot of time." Users in big cities such as New York or Los Angeles were least likely to spend time in Second Life, not only because they were busy but because they had less need to escape to an alternative, anonymous world, he said. "Bad weather, oppressive regimes, poor economic conditions -- that's what makes an SL user."
http://www.guardian.co.uk/feedarticle?id=7476767
Reuters, Monday April 21 2008 *Founder sees potential for Second Life to go mainstream *says close to finding new Linden Lab CEO *says IPO still not a priority By Georgina Prodhan, European Technology Correspondent
FRANKFURT, April 21 (Reuters) - Virtual world Second Life has the potential to become mainstream once computers and connections catch up with the aspirations of its creators, its founder told Reuters in an interview on Monday. Despite the fact that user growth is slowing as a wave of publicity subsides, Philip Rosedale believes activity will increase 100-fold as improvements in computers and Second Life's own systems make it easier and more fun to become a citizen. "I estimate we're at 1 percent of total use in 5-10 years," said Rosedale, the chief executive of Linden Lab, which runs Second Life, comparing its trajectory to that of the World Wide Web, which entered the mainstream in the mid-1990s. Second Life has established a niche following among fans patient enough to grapple with the technology, but many who dabbled when the hype surrounding the virtual world was at its peak were deterred by the time, effort and technology required. Second Life has about 13 million registered citizens but only a hard core estimated to number several hundred thousand are thought to to be regular visitors. User hours grew by 15 percent in the first quarter of this year compared with the fourth quarter of last year, to almost 350 million. Rosedale said a new generation of computers with more powerful graphics capacities would help stimulate wider interest in Second Life, where avatar models representing users fly or teleport around and can buy and sell land in Linden dollars. "You have to wait out the PC retirement cycle," said Rosedale, who plans to step down as CEO to concentrate on product development and strategy.
He said he wanted to spend more time on improving Second Life, for example by making it easier to learn how to fly, walk and exchange money and to find things and people in the three-dimensional virtual world. Rosedale said he was close to finding a new chief executive for Linden Lab. "We may have some news in the next few weeks." He declined to say whether the person was likely to be an insider or an outsider but said the new CEO need not necessarily have a software development background. Rosedale, visiting Germany on a tour of Europe -- Second Life's most important market outside the United States -- said the appointment of a new CEO should not be taken as a sign that a public listing was imminent. "There's no change in the strategy there," he said. "We can go public any time we want. Revenue is growing with users. We're profitable. We have the luxury of waiting." Linden Lab, whose backers include Benchmark Capital and Omidyar Network, does not disclose its revenues. Rosedale said Second Life's failure as yet to reach a mass market had partly to do with the unexpected rise in popularity of laptop computers, which are typically less well equipped to process three-dimensional graphics than desktop computers. "When we started the company in 1999, it was obvious that broadband would become widespread and at the same time Nvidia released its GeForce2 (graphics chip)," he said. "What we didn't anticipate was Wi-Fi and the rise of laptops, which couldn't do 3D." Asked to explain the appeal of Second Life -- which has no game-like aspects such as points-scoring, winners or losers -- Rosedale said: "The only thing that SL users have in common is that they have a lot of time." Users in big cities such as New York or Los Angeles were least likely to spend time in Second Life, not only because they were busy but because they had less need to escape to an alternative, anonymous world, he said.
"Bad weather, oppressive regimes, poor economic conditions -- that's what makes an SL user." (Editing by David Cowell)

Failure to adopt e-payments costing Ireland €1.4bn a year

The Irish economy is losing up to €1.4bn a year due to huge inefficiencies in rolling out electronic payments services, the Irish Payments Services Organisation (IPSO) has claimed.
Ireland is one of the most inefficient countries in Europe when it comes to electronic payments, IPSO said, with the continued reliance on cheques and cash costing the economy up to €1.4bn annually. The organisation described the cheque as “an obsolete form of payment” which must be eliminated from Irish society to ensure a more efficient payments landscape. Ireland is one of the last few significant users of cheques in Europe, with our usage double that of the EU average. Cheques account for more than 75pc of all non-cash payments in value terms, IPSO said. A reluctance to embrace electronic payments is stifling the nation’s productivity, according to the organisation. “Our payment patterns remain firmly fixed on the lower end of the efficiency scale,” said Pat McLoughlin, chief executive, IPSO. “While there is an abundance of electronic payment options available to Irish customers, Irish domestic payment behaviour patterns continue to be heavily reliant on cash and cheque options which are the most costly and inefficient. This is incurring significant costs to small and large businesses on an annual basis.” McLoughlin called for a deadline to eliminate cheques from Irish society, declaring they should be obsolete by 2016. IPSO has also announced figures from new research that shows 73pc of the Irish population owns a Laser card, a 40pc increase on Laser card ownership since 2006. Some 69pc of peopled polled by IPSO stated they would increase their card usage if the minimum spend requirement was removed by Irish retailers. By Niall Byrne http://www.siliconrepublic.com/news/news.nv?storyid=single10783

EU's McCreevy tells payment card cos not to use SEPA as excuse for price rises

BRUSSELS (Thomson Financial) - EU internal market commissioner Charlie McCreevy said payment card providers must not use the single European payments area (SEPA) as an excuse to replace national card payment schemes with more expensive ones. In a speech in Dublin, McCreevy said there is 'justifiable concern' that greater functionality of payment cards could come at the cost of increased market concentration and a more expensive payment card for the merchant. 'At the heart of this issue is our concern that cheaper national card schemes should not be replaced by more expensive payment card schemes, using SEPA as a pretext,' he said. McCreevy also said that commission's plans to implement SEPA, and recent legal proceedings against Mastercard and Visa, called for banks to create a new European player in the industry. 'Of course, as regards the possible emergence of a genuine European scheme, I fully recognise that where banks are called upon to make fresh investment to create a new EU debit card player, clarity on possible business models and a possible MIF (multilateral interchange fee) that is compatible with EU competition law is crucial,' he added. Last December, the commission ruled that MasterCard (nyse: MA - news - people )'s interchange fee payments network within the European Economic Area (EEA) is illegal. McCreevy reiterated that whilst the decision was received with 'mixed feelings' by the banking industry, it did not conclude that all MIFs are illegal per se. frances.robinson@thomsonreuters.com http://www.forbes.com/afxnewslimited/feeds/afx/2008/04/18/afx4906332.html

European payments industry to convene in Helsinki

Finextra Research and the Euro Banking Association will this year hold their annual European payments forum - EBAday 2008 - over two days in Helsinki in June, with the support of lead sponsors Deutsche Bank, JPMorgan Chase, Nordea, Pohjola Bank, and Logica. Now in its third year, EBAday2008 will look beyond the practical compliance requirements of operating in a Single Euro Payments Area and deal with the strategic questions that banks must address if they are to prosper in the new business environment. Adopting the theme, 'Towards end-to-end effectiveness of payments' the two-day event at the Marina Congress Centre will for the first time play host to the corporate community with a series of special interest sessions dedicated to the impact of Sepa on corporates and opportunities for corporate innovation in payments. The top-level conference and seminar programme at EBAday is complemented by an exhibition showcasing the complete spectrum of payment processing services from leading banks, ACHs, technology vendors, and consultancies. With two months to go before EBAday2008 opens its doors for business, the exhibition floor is fast approaching sell-out, reflecting the growing success of the event in attracting a high quality delegate audience. To register for the event and get the latest updates on the speaker programme and agenda, go to www.ebaday.com.

Ipso puts cheque abolition target on hold

20 April 2008 By Emma Kennedy The Irish Payment Services Organisation (Ipso) is awaiting responses from a national payments advisory group before it proceeds with its target of ending cheque payments by 2016. Pat McLoughlin, chief executive of Ipso, said it had presented a paper considering the future of cheque payments to the national advisory group responsible for the National Payment s Implementation Programme. The advisory group includes representatives from government departments, regulators, the payments industry and business and consumer representatives. McLoughlin said he hoped to have responses within the next two weeks, and would then be in a position to approach the government about devising a national strategy to eradicate cheques. He said the government needed to lead the way, by reducing its own use of cheque payments. In 2006,McLoughlin’s predecessor at Ipso, Stewart MacKinnon, set a deadline of 2010 for scrapping cheques as a means of payment. ‘‘Unless a national plan is established to end cheque payments, the converted will keep talking to themselves and slow progress will be made,” McLoughlin said. Ipso claims that, in terms of using electronic payment methods, Ireland is among the most inefficient countries in Europe and estimates that a reliance on cheques and cash is costing the economy up to €1.4 billion annually. Ireland’s cheque usage is about double that of the EU average, with cheques accounting for more than 75 per cent of all non-cash payments in value terms, according to Ipso. McLoughlin said there had only been a 4 to 5 per cent reduction in cheque usage in 2006, and predicted a similar figure in 2007. He said Ireland looked set to fall further behind the rest of Europe, based on that rate of reduction in cheque usage. http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=32225-qqqx=1.asp

Why Kiddie Worlds Dominate

From Digado; "When I posted 'The Teen Dilemma' it was already obvious how Linden Labs was missing out on the big potential for the next couple of years - the teen based worlds. Neopets claim of 30 million unique users, Club Penguins sale and nickelodeon's announcement to open a series of virtual worlds made sure even the most sceptic analysts can't deny the upcoming market for persistent, social environments for kids. At the last VW'08 conference it became painfully obvious how big the gap between the kids & teens and the actual adult audience was according to the Reuters report. Apart from a Second Life stand there was hardly any material targeting the adult virtual world participant.
So why is it these kidsworlds are currently dominating the market, and have no intention of surrendering this position any time soon, with about 30 to 40 worlds getting ready to launch in the next 12 to 18 months? Here are 10 reasons why I think the marketing money right now is going towards kids:

1. Kids are already online, and used to virtual environments
2. Kids have proven to be capable of providing critical mass
3. Kids know the value of Virtual Products (status) by nature
4. Kids don't object to the controlled, safe environments corporations want
5. Kids play, play creates content, content captivates and creates lock ins
6. Kids are not sceptical about branding
7. Kidsworlds are centralized, creating valuable 'focus points' for advertising
8. Kids don't go bezerk on corporate decisions
9. Kids want stuff. Adult 'stuff' such as coffee mugs don't work, toys do
10. Kids are harder to reach outside of the internet
http://digado.nl/10-reasons-why-kids-dominated-vw08.html

100 + Kiddie Virtual Worlds + CoolCamels.com

Vrtual Worlds Management released a new report on Youth Worlds: Based on a comprehensive research available through Virtual Worlds News they have found that there are now over 100 virtual worlds operating or in development with a focus on the youth market (18-and-under). A list of over 100 virtual worlds targeted at youth now online or being developed.
http://www.virtualworldsmanagement.com/2008/youthworlds.html But they forgot CoolCamels www.coolcamels.com - which is GREAT!

Linden Lab Struggling With Open Source Initiative

From one of the most prominent Second Life developers on the open source viewer; "The Moment of Truth: A very insightful person once told me to look at what people are doing rather than listening to what people are saying (which more or less is a variation of "actions speak louder than words"). I can't ignore any longer the gap between what I'm actually doing compared to what I've been planning to in regards to the SL™ viewer. If you look back over my last posts here, I said that I wanted to build something based on the 1.19 version, but if I look back what I actually did in over the last weeks, I see that I just didn't. Not that I didn't want to, it's just that I did not spend time on it after making an initial attempt with an 1.19.0 RC. Today, after I heard through the blog comments here that 1.19.1 went gold, I wanted to give that a shot, but seeing that there isn't any up to date source and hearing that a couple of people had trouble getting it to run out of the box, was the proverbial straw that breaks the camel's back. I just one time too often stumbled over LL™'s inability to support their open source in the most basic way."
http://nicholaz-beresford.blogspot.com/2008/04/moment-of-truth.html

Mssively also covers the story here; http://www.massively.com/2008/04/07/second-lifes-best-viewer-ceases-development-the-mad-patcher/

"We here at Massively have never seen a viewer experience as good or as smooth as those provided by Beresford's patches, and we're going to miss that. Beresford's viewer felt like a luxury motor vehicle compared to Linden Lab's official viewer - and could be run for days without worrisome crashes or memory leaks."

German World Panfu Teaches Children Spanish; Sees 1M+ Registrations in 4 Months

Panfu is a kiddie virtual world based out of Germany aimed at teaching children Spanish with games and socialization. Most of the content is in the localized language, but some is left in Spanish to promote immersion. The browser-based 2.5D world is ad-free--the educators behind it seem staunch on that point--and is supported by a $5.95/month subscription that gives premium users to buy clothes, own pets, and customize treehouses. "We launched this site in December 2007 in Germany and have seen more than 1 million sign-ups since in Germany alone," explained Dr. Zouhair Belkoura. "Driven by the huge success, we were quick to also launch our platform in Spain, France, and the Netherlands in February. The UK and Poland sites went online yesterday. "
http://www.virtualworldsnews.com/2008/04/german-world-pa.html

The Sims Breaks 100 million

I love the Sims. Here are two good articles on EA's most successful property of all time that is now a $4 billion franchise;
http://www.nytimes.com/2008/04/16/arts/television/16sims.html?ref=technology
http://firefox.org/news/articles/1402/1/The-Sims-Game-Breaks-100-Million/Page1.html

In only eight years, the Sims ™ has gone from a brave new game to sales figures of over 100 million, official as of April 16, 2008, according to its manufacturer Electronic Arts, Inc.
Noted by Wikipedia as "one of the most successful video game series of all time," the game can be played on a PC as well as popular game platforms like Wii, Playstation 2, and Nintendo. There is no specific agenda to the game--it's an open-ended creative endeavor where players create characters and then take them through virtual lives, where they meet other characters, acquire homes and other assets, lose homes by not paying their bills, and experience other aspects of real life like birth, dating, marriage, even aging and death. Although the creation of characters and life experience is similar to that in Linden Life's Second Life, the latter has taken on much more the form of an alternate lifestyle for its participants, which the Sims remains much more recreational. The game has been published in 60 countries and 22 languages, and even has its own language called Simlish. A fun fact provided by EA in its press release: if 100 million boxes of The Sims were lined up end-to-end, they would stretch from New York City to Moscow. Based in Redwood City, California, Electronic Arts, Inc., has continued since 2000 to provide upgrades to the popular game, moving into full 3-D versions, with storylines, more gadgets and at one time, a massively multiplayer online game (MMOG) that has since been downsized to another EA product, EA-Land. Players new and old can still hook up with other aficionados online at www.TheSims2.com to exchange information, hints, stories and get free stuff for their characters.

Second Life Economy Grows But Fewer Users

By Eric Reuters
SECOND LIFE, April 15 (Reuters) - Fewer new users are signing up for Second Life, but the faithful are spending more time and money than ever inside Linden Lab's virtual world. Second Life's in-world economy is growing at a rate of 15 percent annually, Linden Lab CFO John Zdanowski (writing as Zee Linden) said on Tuesday. User hours, concurrency, and economic transactions all showed robust growth. But even as time and money spent in Second Life swells, Linden's premium subscriber base -- the paid accounts that are allowed to own land on Second Life's mainland -- declined for the fourth consecutive month in March. The total avatar population grew by 3.2 percent to just over 13 million, the slowest month-to-month growth on record. The numbers suggest that a smaller, highly engaged base of Second Life users is intensifying its interest in the virtual world even as Second Life's appeal to new users fades. Zdanowski said Second Life achieved a gross domestic product of US$300 million by the end of March, a larger total economy than real-world nations such as Dominica or Micronesia. While Second Life's economy is still significantly smaller than it was before gambling was banned last summer, the number of financial transactions between users shows relatively steady growth. More money is also circulating through the LindeX, Linden Lab's exchange for converting real-world currency into Linden Dollars, and strong consumer demand has pushed average land prices up from L$6.3 per meter to L$11.5 per meter in three months. Linden has said it will increase its supply of land to put downward pressure on prices, a move that angered some existing owners of virtual homesteads. But even as the overall demand for land surges, there are fewer buyers in the market. Second Life shed 1,656 paid accounts in March, the fourth month in a row more people got out of the land trade than entered it. Total premium accounts stand at 89,875, below last summer's 94,607 peak. Second Life's population at March's end grew to just over 13 million, although that number includes an unknown number of inactive accounts widely thought to be about 90 percent. But in March only 408,000 new accounts were created, the smallest gain in absolute numbers since September 2007, and the smallest monthly percent gain since Second Life's debut in April 2001.

Linden Lab's Financials

Good speculative post with decent analysis and conjecture by Prokofy Neva aka Catherine Fitzpatrick on Linden Lab's financials (Linden is open about a lot of things other than its financials ...); "A Nation With $36 Million Annual GNP" http://secondthoughts.typepad.com/second_thoughts/2008/04/a-nation-with-3.html
In public group chat today in Metanomics, a group of 779 people interested in attending the Metanomics series organized by Prof. Robert Bloomfield of Cornell University, Zee Linden (John Zdanowski, CFO of Linden Lab in real life), made a number of quite interesting statements that haven't been publicized before: In response to several queries from concerned residents fearful of media and blog rumours that LL is going under or going to IPO or merge, he said Linden Lab had a free cash flow of $6 million in Q1 [9:14] Zee Linden: We had over $6m of free cash flow in the first quarter...I don't think we're going anywhere...

The back-of-the-envelope figuring for LL's revenue always starts from the premise that it has $60 million in income from tier alone, figuring that 16,000 islands currently (private islands make up more than 75 percent of the grid) at $295 a month in tier equals $60 million. That's not even counting then the figures for sales at $1695 for islands, and as much as $3500 or $4000 for mainland sims with $195 monthly tier. LL also makes money from special licensing fees (the Sheep, in order to stage the CSI event; and IBM to run SL behind a firewall).

Another Virtual World / MMO - this time in 3D!

Sociotown is a new massive multiplayer online game (mmog), and it has just entered public beta phase. The most interesting part about the game is it's 3d, and in a web browser. In the past online mmog's have generally been 2d so it's nice to see these things in 3D (not that there's anything wrong with 2d!).

Equifax buys stake in Russian company

ATLANTA (AP) - Equifax (NYSE:EFX) Inc. bought 28 percent of credit information company Global Payments Credit Services LLC and plans to rebrand the company as its outpost in the Russian market, the credit reporting bureau said Tuesday. Equifax did not disclose terms of its deal with Global Payments Europe SRO, which is the European unit of Global Payments Inc. (NYSE:GPN) The company also took the option to buy up to 50 percent of Global Payments Credit Services. The move is part of its plan to expand into Russia, India, China and Mexico. http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-24511230.htm

EU to Compete with Visa, Mastercard

THE European Commission said yesterday that contacts had been made with banks on setting up a payments card network that could rival Visa and MasterCard. “We have had a series of contacts with banks and other interested parties about payments cards,” said commission spokesperson for competition matters Jonathan Todd. The Financial Times reported yesterday that Commerzbank, Deutsche Bank of Germany and French banks Societe Generale and BNP Paribas were preparing to decide on launching a new card network in the coming months. “Members of this project have approached the commission, but they’re not the only ones,” Todd said. According to the Financial Times, the willingness of the German and French banks to go ahead with their initiative depends on how high the commission would accept interchange fees to be set. — Sapa-AFP http://www.dispatch.co.za/article.aspx?id=193834

Apaja CEO Takes Baby Leave

After a busy 1 year on the job, Apaja CEO takes maternity leave. Congrats! From Antti Vilpponen · April 15, 2008 @ 8:09 pm - Apaja Online EntertainmentApaja Online Entertainment has done some changes in their management while expanding the casual gaming service to Turkey, according to a press release sent out earlier today. Inka Mero, the CEO of Apaja, is on a maternity leave and Tiina Zilliacus has joined the company as an acting CEO, Executive Vice President. Tiina Zilliacus has previously worked with Nokia Online Shops and Sonera Zed -service, according to the information on the management. Also reported in the press release is the expansion of Playray gaming service to Turkey, the 15th country where the service is available. No date for the launch of Turkey is given in the press release. Playray now attracts 2.5M unique visitors on a monthly basis. http://www.arcticstartup.com/2008/04/15/apaja-changes-executives-and-expands-to-turkey/

New CEO: Inka Mero
March 28, 2007 – 11:08 am

I wrote earlier that we’ve finally found the new CEO for our company. Now I can announce the name too: Inka Mero. Inka comes to Apaja from Nokia where she has been in charge of Nokia’s global strategic alliances and partnerships. Before Nokia she worked five years in Sysopen Digia as Vice President of Sales and Marketing. I’m extremely happy for Inka joining our ranks! http://halinen.net/blog/?p=44

ClickandBuy Terminated by Skype

For months now there has been no news from ClickandBuy. But now it seems the bad news is starting to pour in. One of its highest profile customers, Skype, has recently terminated its relationship with ClickandBuy; http://heartbeat.skype.com/2008/04/clickandbuy_payments_no_longer.html
"ClickandBuy payments no longer accepted By My status Kaili on April 10, 2008.
"From 8 April 2008 we will no longer accept payments by the ClickandBuy system. There are, of course, many other ways to pay for Skype credit and products. We hope you will not be greatly inconvenienced by this change. If you have any further queries please contact customer support or check out our forums."

Daly Show Does Second Life

If you watch only 1 video on virtual worlds, this is the one for you! Hilarious ...

RBS Technology Fights Fraud

The Royal Bank of Scotland is planning to roll out a debit card payment system that will bring sophisticated technology to cut errors and fraud from debit payments. The Royal Bank of Scotland (RBS) is the first to use a system for debit card payments which automatically verifies details such as the addresses of both parties and checks whether the payments follow a usual pattern. The project aims to cut fraud and mistakes which cost businesses billions of pounds a year. Jane Barber, head of product development at RBS, said the bank is looking across its entire business to decide where to deploy the system. "Because we are a big business with a lot of core services, it is intellectually challenging to decide where to put it." RBS plans to use the Banking Wizard Absolute service from Experian Payments, formerly Eiger Systems. The system uses information from Experian's information business to check the authenticity of bank accounts and to verify that the person making a debit payment is who they say they are. The project aims to cut the costs associated with payment failures. "Business customers want to process payments quickly and easily but everytime something goes wrong it makes it difficult," said Barber. According to the UK trade association for payments, Apacs, 2% of direct debits and direct credits, equivalent to 111 million transactions, fail each year. The cost of resolving failed debit payments is estimated to be as much as £35 per transaction or £3bn annually, according to research from Experian. Traditional payment systems used by banks automatically check the bank account numbers and sort codes against databases to verify they are genuine numbers. But they do not verify the details of the individual making the payment - such as address and details of previous payment - which could make errors and fraud less likely. "This is typical across the banking sector," said Gareth Lodge, analyst at TowerGroup. "As far as I know, no UK bank has a system that can do this because none has existed before." Lodge said installing the software across the business will give RBS a single view which will help it spot frauds. "For example if somebody tries to commit fraud at its insurance division, transactions will be automatically blocked at its other divisions." The Experian system is web-based and has a single interface so the bank will only have to implement the software once. RBS will pay for the service on a transactional basis with Experian Payments receiving a payment whenever a transaction is made. Barber said the arrival of the single European payments area in January and the Faster Payments System next month means payment security is vital as payments systems will be increasingly targeted by fraudsters.

Experian Says UK Business at High SEPA Fraud Risk

UK corporates are risking opening their doors to fraudsters by failing to upgrade anti-fraud systems to deal with payments made via the single euro payments area (Sepa), according to research from Experian. In a study of telecoms, insurance and utility corporates, Experian found that hardly any had upgraded their anti-fraud payment measures, following the introduction of Sepa. A total of 86% have not even assessed the payment fraud risk presented by Sepa. However, all the corporates interviewed said banks had a responsibility in protecting them against fraud. Jane Barber, head of product development at Royal Bank of Scotland, said corporates and banks had to improve their fraud defences to take Sepa into account. "As we go into a more global payments world we have to make sure we have got the right systems in place," Barber said.

Charlie McCreevy's April Fools Address "Releasing the power of payments"

Charlie McCREEVY European Commissioner for Internal Market and ServicesSingle Euro Payments Area 7th International EPCA Conference "Releasing the power of payments" La Hulpe, 1st April 2008 "Ladies and Gentleman, Thank you for inviting me to address you this morning on the subject of SEPA, the Single Euro Payments Area. Today is April fool's day, but believe me, SEPA is not a hoax. We already have 4000 banks in Europe adhering to the EPC credit transfer scheme and a volume of more than 100,000 transfers a day. But why is SEPA so important for Europe? Let us go back a few years. I remember Sir Leon Brittan, a former EU trade Commissioner in the early 90s, telling the story about ordering a book costing around �10 from another Member State, but when the bank charges were added in the cost, it came to �30. This is why SEPA is important for Europe: it brings concrete benefits for EU citizens! Today, a cross-border transfer can be executed at the same price as a domestic one: no more than a few Euro cents! How does SEPA release the power of payments to the benefit of the whole European economy? This distinguished audience of professionals knows it better than anybody: payments are essentially a volume-related business. The integration of national payment systems though SEPA will produce substantial economies of scale thus lowering payment processing costs.
It will also enhance competition by making cross-border competition for payments possible. Together, these will reduce the cost of payments to users. Major payment users such as corporates, public authorities, retailers and SMEs should benefit from improved business efficiency and reduced operating costs linked to payments. By facilitating cross-border payment, SEPA could have a dynamic impact allowing especially SMEs to reap the full benefits of the internal market. SEPA could also have a hugely positive impact on the integration of retail financial markets. verall, SEPA will increase the competitiveness of European business and the financial sector, as well as bringing about the integration of payments markets in the EU, which was identified in 2000 as one of the key measures to achieving the goals of the Lisbon Agenda. To quote a number: 123 billion euros in the next 6 years. These are the expected benefits of SEPA according to a study carried out by Cap Gemini for the Commission. But the story does not end here: if we can use SEPA as a platform for e-invoicing, then a further 238 billion euros of savings could be achieved. In addition, SEPA could also be used as a platform for e-lending and trade financing. In the public sector, SEPA will, I hope, be used to drive e-Government and the development of transactional services in the areas of e-procurement, taxation, and customs. Ladies and Gentlemen, The future holds great potential, but there is still a long way to travel. I would like to take this opportunity to remind you also about the challenges ahead: SEPA migration, cards, additional optional services and SEPA governance.

First SEPA migration. As far as migration is concerned, we need a realistic timeline for the full completion of the project. By completion I mean the widespread use of SEPA products by retail customers, SME�s, corporates and the public sector. SEPA migration started last January and the intention is that by 2010 a critical mass of payment instruments should have migrated. However, more clarity is required on what constitutes a "critical mass of payments" in order to avoid different interpretations of such a concept in each of the Member States. Uncertainty about the end game for SEPA could easily become an excuse for delayed migration. But, the longer the transition period, the longer the period banks will have to bear duplicate costs, first-movers will be handicapped, and SEPA pricing as a whole will be suboptimal. This argues that a realistic timeline for phasing out old national payments products and migrating customers to the new SEPA products should be set up. Public authorities represent nearly 50% of EU GDP and around 15-20% of all payments. Given the wider benefits to society, public administrations could and should play a major role in kick-starting migration. In May of last year I hosted a major conference in Brussels to familiarise public authorities with the benefits of SEPA. Electronic payment services can enable the simple payment of various government fees, taxes and social benefits and SEPA could be used as a platform for e-Government. However, the Conference showed that while public authorities strongly support SEPA, concern about the pricing and performance of SEPA products may, sadly, create a negative climate for early migration. But SEPA is a market-driven process, and in a market driven process, suppliers should persuade customers of the merits of new products so that migration occurs naturally. Banks should espouse the non-deterioration principle, namely that the new SEPA products should have price/performance characteristics at least as good, and preferably better, than existing products. The ECOFIN, the Council of European Finance Ministers, has already highlighted its importance in its conclusions last year and the Commission will continue to monitor this issue and, at the same time, will strive to promote the role of public administrations in the timely and successful implementation of SEPA. A second issue, which concerns me, is what happens to national debit cards. Within SEPA, functionality will undoubtedly be expanded so that a card can in principle be used at any terminal in the euro zone. Unlike the comprehensive rule books for credit transfers and direct debits, the SEPA Cards Framework does not develop any detailed rules and standards, but rather describes three options for attaining SEPA compliance. There is a justifiable concern that under current market developments, this increased functionality could come at the cost of increased market concentration and the risk of a more expensive payment card for the merchant and consumer. At the heart of this issue is our concern that national card schemes should not be replaced by more expensive payment card schemes, using SEPA as some sort of pretext for increasing prices. More competition in the EU payment cards landscape should mitigate against such tendencies. A first decisive step has been taken by the Commission last December, with the prohibition decision addressed to Mastercard regarding MIF for cross-border payment card transactions with MasterCard and Maestro branded debit and consumer credit cards in the European Economic Area (EEA). The Decision found that Mastercard's MIF inflated the costs of card acceptance by retailers, since the MIF accounts for a large share of the final price companies pay for accepting Mastercard's payment cards, without leading to proven efficiencies. Let me be clear on one point Ladies and Gentlemen: the Decision did not conclude that all MIFs are illegal per se. However, Mastercard could not demonstrate that its MIF contributed to objective efficiencies, meaning technical and economic progress, or that it benefited consumers. I have, of course heard some voices who say that this Decision is jeopardizing SEPA, even killing it. I reject that. In fact, the Mastercard Decision supports the SEPA project in two ways: Firstly, it obliges Mastercard to refrain from implementing its new "SEPA" interchange fees for the euro zone. This ban will ensure that SEPA does not lead to permanent price increases linked to payment cards. Secondly, as a consequence of the Mastercard Decision, there will be better conditions for new schemes to compete with incumbents, as the current MIF practice has to change. Last week my colleague Neelie Kroes also opened an investigation into VISA's MIF.Of course, as regards the possible emergence of new schemes, I fully recognise that where market players are called upon to make fresh investment to create a new network, clarity on possible business models and a MIF that is compatible with EU competition law is crucial. The need for clear communication is obvious. In response, the exceptional step of publishing a provisional non-confidential version of the Mastercard Decision has been taken. But this is not the end of the story, as we will of course continue our dialogue with the industry in order to make sure that there is sufficient clarity and legal certainty in the market. There also needs to be further progress on standardisation to allow for a greater variety of card schemes on the European market. Therefore, I very much welcome the recent work initiated within the EPC on the development of card standards and urge its rapid completion.

The third issue I wish to touch on is Additional Optional Services. These will play an important role in the future European payments market and are vital for the SEPA �business case� of many institutions. Payment services will become increasingly commoditized and banks will need to develop new sources of revenue by the provision of add-on-services, such as e-invoicing. But, the risk is that the provision of these services may lead to new, national fragmentation and the economies of scale and the massive productivity gains that could be achieved by their development at EU level may not be attained. Additional Optional Services are not described at length in the EPC Rulebooks as they are considered part of the competitive space. However, I think the EPC could consider providing the industry with clear ideas for the development of AOS (beyond the core SEPA services), addressing the need for interoperability and preventing fragmentation. The fourth and final issue is SEPA governance. The Commission attaches great importance to the governance arrangements for the European payments market. If users cannot participate effectively in the SEPA governance arrangements, then it becomes doubtful whether the current and future needs of users will be adequately met on a timely basis. This is vital for a complex project such as SEPA, which involves so many different end-user groups in various countries. The creation of the stakeholders' forum by the EPC is clearly a move in the right direction, but how this user consultation is incorporated into EPC decision-making may need further reflection. Ladies and Gentlemen, You have already achieved much but more remains to be accomplished if SEPA is to become the world-class payment system that Europe's citizens and businesses deserve. As regulators, we can only try to provide a level playing field and a framework for competition. I am sure you have the capacity, skills and determination to make this opportunity a reality. Thank you for your attention.

EIGER SYSTEMS RE-BRANDS AS EXPERIAN PAYMENTS

London - 3 April 2008 Experian®, the global information services company, today announced the re-branding of Eiger Systems, a leading developer of strategic payment solutions, to Experian Payments. As Experian Payments, the business will leverage the data and international presence of Experian to develop international corporate payments services to help both corporates and banks to make their payments correctly and efficiently. Experian Payments will build on the prominent status that it has built up in the UK payments market[1] to further its international growth plans. As national payments landscapes become increasingly international in nature, particularly in the light of the Single Euro Payments Area, Experian Payments believes it will be well placed to respond to market and customer demands through Experian’s global reach. The acquisition of Eiger Systems by Experian in 2006 opened up access to a wealth of data from within Experian with which the division plans to continually enhance its services. Jonathan Williams, Director of Communications and Product Strategy at Experian Payments, says: “We have a long history of supporting developments in the corporate payments market, such as the industry migration to BACSTEL-IP, support for the Euro Payments Council resolution on BIC and IBAN and Bacs’ new ETS Service. This has enabled us to successfully anticipate and meet the evolving needs of our clients. As part of Experian, we are collaborating with other parts of the group to ensure that clients benefit from the products and services we provide.” Phil Cotter, Managing Director of Experian’s Information Solutions division, comments: “Since our acquisition of the newly-branded Experian Payments, the business has quickly become integrated into Experian and is a valuable addition with its strong data validation and submission services for bulk payments. We are now looking to build on its successes by expanding its international reach to reflect the global nature and demands of our clients’ businesses.”

VISA Expects to Strike Deal With EU

" Visa and EU may reach deal over charges BRUSSELS: Visa Europe said Wednesday it expects to strike a deal with the European Commission that would settle an antitrust investigation into EU charges of price-fixing. The payments card network - which is separate from the Visa based in the United States - said it is trying to convince regulators that the amount it charges for using a card in another country are justified. The EU opened a formal investigation into Visa's fee system last month, saying it may unfairly inflate retailers' costs and raise prices for customers at the cash register. In December it ordered Visa's rival MasterCard to drop cross-border card fees within six months or face huge daily fines. Europeans make more than 23 billion card payments every year worth over €1.35 trillion, or $2.1 trillion. Yet they face extra costs using their cards in another European nation, something EU officials say holds back efforts to create a single market out of the EU's 27 member countries. The chief executive of Visa Europe, Peter Ayliffe, said EU officials had told him they were keen to negotiate a binding agreement with the card industry to end the case, something Visa also favors as the 4,600 banks it represents gear up to make major investments to simplify banking payments across Europe. "We believe a negotiated settlement is the right way forward," he told reporters. "The earlier it happens, the better for everybody. That way we get certainty." But he said Visa was adamant that it would stick to the average 0.7 percent interchange fee it charges for processing credit and debit card payments outside the cardholder's country, claiming it benefited shops and shoppers and helped provide banks with a good business case for dealing with foreign payments. Visa insists that card payments are cheaper than handling cash and more of them would save Europeans close to €1 billion euro. It also opposed any changes to the "honor-all-cards" rule which forces retailers to accept all Visa-branded cards, including debit cards, even if they carry a higher interchange fee. Large European retailers like Ikea, Carrefour and Tesco have called on the EU to take action against what they claim to be unfairly high fees they and consumers must pay to card companies such as MasterCard and Visa. Ikea, the furniture chain, pays fees of about €90 million, or $141 million, annually, while the British supermarket chain Tesco pays around €128 million to the banks for processing credit and debit cards.

ex-Linden CTO Cory Ondrejka's Job Hunting 101

From Cory's blog a revealing and intriguingly intimate look at Linden's ex-CTO's job hunt; "one down, who knows how many to go" Went through my first real CEO interview yesterday. While a few very early stage companies have approached me, this was my first full, meet-the-board CEO interview of an accomplished, 100+ person company. Very interesting day, since I can't imagine a harder challenge than trying to pick the right outsider to come in and lead an experienced, successful group to the next level. I'm sure there is a "101 Questions to Ask a Potential CEO" instruction manual somewhere, but I haven't seen it. In my opinion, it comes down to connecting with the current executive team, founders, and board of directors. Do you inspire trust and confidence in your ability to raise the performance of those around you, to face difficult challenges, and to add an effective voice to the decision making process.
The company I visited yesterday had , I thought, some particularly good questions around conflict resolution, style, and vision that were fun to answer and generated more questions on both sides. Like most high-performance technology companies, they were a little less organized than they wanted to be, but the result -- a rotating subset of the interview team -- seemed pretty effective and kept me on my toes. I may incorporate that as a strategy in the future when I'm back on the interviewer side of things! And, no, I don't know whether it will go forward. I think I did a good job presenting an accurate picture of who I am, what my strengths and weaknesses are, where my passion and experience aligns with their needs, and where we aren't a good fit. Even if they feel I'm who they want, there is no guarantee I would take the job. But I am still interested and spending the day being tested by a really smart group was a blast. Of course, I feel like I should take this opportunity to talk about Paul Graham's "You Weren't Meant to Have a Boss" post that has been generating a fair amount of blogging noise, both pro and con. I thought his post was particularly apropos, since I'm currently in the process of talking to large technology companies (>10,000 employees), medium companies (>100), small companies (>5), and startups (<5). They all have positives and minuses, although my biases are pretty clear since my last three jobs were at early stage startups. In fact, my last time working for a large company was Lockheed in 1994. But that doesn't mean I think working for a large or medium company would be foolish. Larger companies have expertise in many areas -- people management, for example -- and resources rarely available to startups. With a young daughter, I might decide to trade off for a different risk-reward profile than I have in the past. I might view it as an opportunity to learn by working in a different environment. However, no matter the scale of the organization, the key question is how hierarchy is used (or not used.) Hierarchy is often spoken of as a singular structure -- usually the org chart -- but is actually made up of at least two independent components: control and communication.

Control: Who can tell you what to do
Communication: How information flows between people in the organization
Now, when we think of traditional hierarchical organizations, these two functions are superimposed. You have a boss. He tells you what to do, gives you salary reviews, and fires you. Sometimes, as in matrix management structures, there are multiple hierarchies, so that the person who tells you what to do may be different from the person who reviews your performance. But, these are not the only choices. Think about control for a moment. Forms of government are a reasonable approximation of management structures:

Monarchy: typical management hierarchy, with decider at the top
Anarchy: either nobody tells anyone what to do or everyone can tell anyone what to do
Republic: everyone selects a group to tell them what to do
Direct Democracy: everyone participates in every decision
Or, consider communication parallels:

Broadcast: one to many
Telephone: one to one, sometimes few to few
Blogging: many (well at least a few) to many
Organizations have the freedom to choose whichever structures make the most sense based on their size and requirements. More importantly, different groups and levels within an organization can choose different combinations. When many-to-many communication is failing because of team size -- how many emails can you process a day? -- either adopt a different communication strategy or create interfaces between teams. When you need all hands on deck to fight a fire, democracy might not be your best option, but once the fire is out and you need to innovate, bring on the anarchy!
Which brings us back to organizational size. Clearly, strategies that work for 3 or 5 -- direct democracy, many-to-many communication -- won't work for a company of 10,000. Many-to-many communication scales as O(n^2), so if everyone is trying to engage with everyone else they are going to spend all their time just reading email. Worse, if all 10,000 have to vote on every decision, the stress of knowing everything so that you could alway vote wisely would be crushing. One response to this is a traditional hierarchy. However, it this hierarchy need not be fractal. If you have teams of 5 or 20 or 50 that operate smoothly with different structures than the company as a whole, that is fine. In fact, it's better than fine -- it's almost certainly what you want! A good example of this were how game teams were run at PCP&L. The team helped build the design, schedule, and budget and then was generally cut lose to exist as an insulated pocket within the company. For all intents and purposes, the game team was a little, entrepreneurial startup, except that you had the surrounding company for health care, payroll, etc. Wholly owned subsidiaries can operate the same way, with the employees within the sub virtually unaware of the structure and requirements of the parent company. The question comes down to how flexible will the group I work with be allowed to be, because all projects have changing requirements throughout their life cycle. A small company or startup means flexibility is limited by funding and resources. In a large company, that flexibility is more limited by culture and habit. Some people might argue that a small company's limitations are better because "you control them", that it is better to be denied flexibility because you ran out of money rather than some pointy-haired boss' random decision. Maybe, but in my experience, not being able to execute due to a limitation sucks either way. So, for me, choosing based on company size is the wrong metric. Instead, the question should be about how open your design space is, what opportunities you need, what impact you hope to have, and which constraints most impact these vision and goals. For some, that will mean a startup, for others a big company. And that will be OK." http://ondrejka.blogspot.com/

ZooKazoo "We can do a lot better than ... Club Penguin and Webkinz

Based on this screen shot, I am unconvinced. But goo dluck to them. The ClubPenguin Trio have made enough money off their 2.5 D pixel penguin drivel.

"ZooKazoo creates a fun online world for kids Dean Takahashi | April 3rd, 2008 | "When Disney bought Club Penguin last year for $700 million last year, it raised a lot of eyebrows. That’s why there are so many online game sites for kids being formed. One of the newest is ZooKazoo, which is coming out of stealth today. ZooKazoo is a cartoon world for children ages 6 to 12, and its creators think they’ve done a better job of creating a cute, Flash-based world for the youngest virtual-world denizens than Disney’s expensive property. “We think we can do a lot better,” said John Kim, CEO of the Palo Alto, Calif., company. “We can engage kids and provide assurances of safety for parents.” Kim, a veteran of media companies including Sony and Disney, has assembled a good team. The company was founded in January, 2007, and it has received angel funding. They went on to design the sit be both entertaining and social from the ground up. But the chances of success are tough. As I’ve been saying for a while now, I’m seeing an average of two casual games companies emerging from stealth each week. The reason? Well, in not so polite terms, “venture capitalists are stupid,” said John Vechey, co-founder of PopCap Games, the Seattle casual game developer behind hits such as “Bejeweled.” There are too many people jumping on a hot trend. The site is getting a steady stream of users thanks to materials it put up on the Yahoo! Kids site. Players can join for free and earn a currency known as “Kazoobits” by playing games. But to spend them, the players need to pay a subscription of $5.95 a month. The currency can be spent decorate a character or room. I watched my eight-year-old play with the site last weekend. She laughed out loud and played compulsively until I had to tell her to stop and get out of her pajamas. The world is easy enough for kids to learn. They start by logging in with the permission of a parent. Then they pick an avatar from among a wide variety of colorful cartoon animals. They can play mini-games within the world, such as floating down a river and dodging rocks. My 11-year-old even had fun playing a game where a panda climbs up bamboo shoots and eats the leaves on them. Next, they get to wander into a lobby and learn how to type-chat. They can go to a post office to send one-way messages to people in the outside world (such as parents). The messages can be used to support a cause, like getting people to help the environment in honor of Earth Day. But, due to child-protection practices, outsiders aren’t allowed to contact the kids. The world is built so that there is no such thing as a private chat among avatars, said David Dwyer, a former Apple researcher and chief operating officer of ZooKazoo. Kids also aren’t allowed to type known swear words or variants of them. If they do, they’re told they can’t say that. If they persist, a human administrator will intercede and give them a warning or eventually kick them out. Beyond being cartoonish, the game constantly plays cute children’s music. Dwyer said he considers that an important part of the entertainment and the company works hard to come up with original tunes. There are two worlds: a nightclub city dubbed “HipHopolis” and a jungle world called “Jungaloo.” Kids can experience “informal learning” by exploring a cave where they learn why jaguars are endangered. That’s a selling point for parents, Kim said, but the game isn’t as explicity about learning as DreamBox Learning (our coverage). The company will add more worlds and mini-games over time. Kim says a lot of the content will be social. The company will accommodate user-generated videos to a theater dubbed “ZooTube” in the future. For now, kids can go into comedy clubs and go up on stage and tell their own jokes. The world’s design is good. But the 19-employee company has to compete against giants such as Club Penguin, Webkinz, Nickelodeon, and Neopets. Not to mention a lot of the other casual game sites for kids (such as Fluid Entertainment) that are sprouting every week. Those companies have the brands. But ZooKazoo can beat them if it’s more fun. That’s one of the things I like about the game industry. Fun wins.

HABBO Survey Released

Los Angeles, CA (PRWEB) April 3, 2008 -- Habbo, the largest virtual world for teenagers worldwide, today unveiled the results of its second Global Habbo Youth Survey. Examining the interests, values, attitudes, online habits of a global audience, the survey reveals teens' current media usage, consumption behavior and brand preferences in order to better understand what compels youth around the world.

For the study, Habbo surveyed 58,486 teens between the ages 11 and 18 from 31 countries and identified five clearly defined behavioral segments amongst respondents. With each group representing approximately one-fifth of the total teens surveyed, the five groups were categorized and described as the following:

- Achievers: Ambitious, strong-minded and materialistic. They value material success and while they have many friends, they do not consider other people's feelings as much as other groups.
- Rebels: Value gathering a lot of experiences in life and enjoy a fast-paced lifestyle. Like Achievers, they want to become "rich and famous," but are not willing to compromise on having fun in order to achieve this goal.
- Traditionals: Value having an ordinary life and see themselves as honest, polite and obedient. They are keen to help others but are less ambitious and pleasure-seeking compared to other segments.
- Creatives: Share many of the same positive traits as Traditionals, but with a focus on creativity. They place value in getting a good education and being influential in life, but they are also active, social and have an interest in traveling.
- Loners: More introverted and less likely than other segments to identify with any specific personality traits. They rarely see themselves as active or self-assured, but are more open-minded in their attitudes compared to Traditionals or Achievers.

A major focus of the survey was how teens communicate today. Nearly 76 percent of teens globally use the Internet to instant message friends, and, overall instant messaging was the most popular communication tool in most countries. Despite 72 percent of teen respondents' saying they have active email accounts, results showed it is no longer a primary means of communication with peers. The survey revealed that email is generally reserved by teens more for non-personal needs such as school or work, or correspondence with family members.

"According to the Global Habbo Youth Survey, the most popular global Web sites amongst teens are YouTube and MySpace," said Emmi Kuusikko, director of user and market insight for Sulake, Habbo's parent company. "Of those surveyed, 50 percent responded that they forward humorous links and videos to their friends, while 30 percent regularly upload content, confirming the notion that teenagers have an active online presence. We have also found that localization is important for teens communicating online, which is reflected by our own success in targeting local markets across the world."

In the U.S., the most popular web sites amongst respondents were MySpace and YouTube, followed by AddictingGames, RuneScape and Facebook.

The survey showed that brand familiarity clearly affects teens' choices as consumers, with 74 percent saying that familiar brands guide their purchasing decisions. Reinforcing the brand familiarity findings, global well-known brands, such as McDonald's, Coca-Cola and Nokia ranked high for both boys and girls. Gender differences are more visible for example in clothing brands. According to the results, boys favor Nike, Adidas and Billabong as their top clothing brands, where as girls preferred Hennes and Mauritz, Nike and Roxy.

The 2008 Global Habbo Youth Survey report is available to purchase as a 250-page hardcopy book. For inquiries and orders, please contact: marketinsight @ sulake.com

Obopay Moves to Allow Direct Payments from User Checking Accounts

(April 2, 2008) In a move that it hopes will attract more users to its mobile-payments product, Obopay Inc. is allowing account holders to send money to other persons directly out of their checking accounts. In a further change, recipients of these transfers no longer need to have Obopay accounts and may have the funds deposited directly into their checking accounts. The move streamlines a process that formerly included an intermediate step consisting of a transfer of funds into the sender’s prepaid Obopay account. Transfers to other parties then took place out of these stored-value accounts. And, starting Thursday, recipients who are notified they have received money will be able to give routing and transit numbers and other details from their mobile phones to make deposits to their checking accounts. Until then, they are using Obopay’s Web site to give these instructions. The new method took effect in March. In a related development, Obopay and Citgroup Inc. announced on Wednesday that the banking giant will start this summer a consumer trial for an integrated Obopay mobile-payments product linked to Citi checking accounts. The trial follows pilots the bank ran last year with Obopay in Boston and Chicago.
Irv Henderson, vice president of product development for Redwood City, Calif.-based Obopay, says the decision to directly tap checking accounts is a response to consumer research the company conducted in November. Users, he says, wanted to be able to use bank accounts they had already created. “For people who are using [Obopay] like a simple wire transfer, we heard they want to use their checking accounts whether as sender or receiver,” he says. “What resonated with us was the need to give senders and receivers more flexibility.” Henderson says Obopay also hopes the streamlined system will appeal to more users and increase activity by existing ones at a time when competition in mobile-payment processing is heating up. “We continue to chip away at the barriers [to adopting mobile payments],” he says. The company is closely monitoring activity to see if it is picking up the expected gains, Henderson says, but adds it’s too early to say. The company plans to do another user survey around the middle of April, he says. “Ease of use and convenience, that’s what I’m really measuring for now,” says Henderson. Obopay will not release how many accounts it has.
Three-year-old Obopay allows handset users to send money to each other—and, in some cases, to merchants—through text messages, through a wireless application protocol site, or through its own application on the phone. Obopay’s fee schedule is not changing: Senders pay a fee of 10 cents per payment, while transactions are free to receivers; those who fund their accounts from credit or debit cards pay a fee of 2.5%.

Amazon.com launches "Amazon TextBuyIt"

SEATTLE, Apr 02, 2008 (BUSINESS WIRE) -- Amazon.com (NASDAQ:AMZN) today launched Amazon TextBuyIt, a new service that lets customers use text messages to find and buy products sold on Amazon.com. With the addition of TextBuyIt to Amazon's existing mobile offering, including its mobile site and mobile iPhone site, customers can now shop, compare prices, and buy from Amazon.com virtually anywhere they are, with any mobile device, using either text messages or their mobile device's web browser.
"With today's launch of TextBuyIt, any Amazon.com customer can now use any mobile device to shop and buy from Amazon.com, at anytime, anywhere they are," said Howard Gefen, Director of Amazon Mobile Payments. "With TextBuyIt, if you're walking out of a concert and want to buy a CD from the artist you just saw, or if you're at dinner and a friend tells you about a great book you should read, all you have to do is get out your mobile device, send a text message to Amazon, reply to the response, confirm your order, and your item will be on its way. It's incredibly simple and convenient."
In less than a minute and using only text messages, Amazon.com customers can find the product they are looking for and complete a purchase using TextBuyIt. Simply send a text message to "AMAZON" (262966) with the name of the product, search term or a UPC or ISBN code, and, within seconds, Amazon replies with the product or products that match the search, along with prices. To buy an item, customers simply reply to the text message by entering the unique single digit number next to the item they want. Customers will then receive a short phone call from Amazon with the final details of their order and asking them to confirm or cancel the purchase. When customers choose to purchase something for the first time using TextBuyIt, they will be asked for their e-mail address and shipping ZIP code they use for their Amazon.com account. With this information, Amazon uses customers' default settings for payment method, shipping address and shipping speed, including 2-Day shipping for Amazon Prime members. TextBuyIt is the latest in a series of mobile offerings for Amazon.com customers. For several months, Amazon.com has been adding more features and enhancing the functionality of its mobile website for customers who want to shop using the browser on their mobile phone. Today, the same Amazon.com shopping features customers enjoy from their PCs are available from their mobile devices, including 1-Click, Prime, Customer Reviews, Wish Lists, Search and stored payment and shipping options. These customers simply go to www.amazon.com using the browser on their mobile device where they are automatically redirected to a site optimized for mobile. Customers use the exact same login, payment, and shipping information as they do on the PC. In recent months, Amazon.com customers have used their mobile devices to purchase everything from books, to big screen HDTVs to $30,000 watches using Amazon's mobile website.
Additionally, last fall Amazon.com released an experience customized for iPhone users. Just like with the Amazon.com experience optimized for mobile devices, when iPhone users type www.amazon.com into their browser, they will be taken to an interface that is optimized for the iPhone and where all the same shopping features they enjoy on their PC are available. The site is tailored to the iPhone's screen size, keyboard, and browser capabilities and is designed to let customers find and buy what they are looking for quickly and easily.

"Russian Paypal" Yandex Partners with Russian Development Bank

Yandex, the leading search engine in Russia has announced a partnership with the Russian Development Bank (RBR). This will allow users of their online payment system, Yandex Money to transfer funds to and from the virtual account via the ATM machines owned by the bank. Yandex Money is a system similar to PayPal. Registration in the system is free and depositing money into the system is done without commission. Withdrawing money is charged at 2%. The system is open to merchants dealing in Russia but is currently restricted to Russian registered businesses. “Together with the Russian Development Bank, we have developed a reliable and secure scheme of interacting between the virtual bank account and card withdrawals” said Yevgeny Zavalishina, CEO of Yandex.Money.”We’re ready to join other Russian banks and are open to cooperation with all market participants.”

CEO of VISA Wants Quick Settlement With EU

-- Visa Europe Ltd. president and chief executive Peter Ayliffe said he wants a 'negotiated settlement' with the European Commission over its cross-border interchange fees, adding that the payments card group seeks an agreement as soon as possible. Speaking to reporters here, Ayliffe said a settlement is the 'right way forward'. He added that the commission is keen to continue the talks and reach an agreement. Ayliffe said while the group is under no 'time pressure' to reach an accord and no strict timetable has been set, it would like to reach a deal as soon as possible. 'The earlier it happens, the better for everybody,' he said. Ayliffe said Visa is looking for closure to the EU's interchange fees case in order to provide certainty going forward in Europe's single market for payments. Ayliffe also said the group's current level of interchange -- set for retailers at an average of 0.7 percent of transactions for processing credit and debit card payments outside the cardholder's country -- is 'justified' in terms of costs and benefits to both retailers and consumers, including advances in technology and security. Big retailers like Ikea, Tesco and France's Carrefour complain that the fees are too high, raising their costs and increasing prices for consumers. He said the group is 'pulling the evidence together' for further talks to justify the fees. Ayliffe added that a common view is emerging that interchange fees -- charges levied on purchases at a retail outlet when the payment is processed -- made on payment card transactions are 'not illegal'. The group said there is 'recognition of interchange's role in payment systems' and that there are 'economic and technical justifications' for the fees' role in the industry.
To this end, Ayliffe said the group was heartened by recent comments made by EU competition commissioner Neelie Kroes and internal market commissioner Charlie McCreevy. Since the start of the year, Kroes has said that not all interchange fees are unlawful, while McCreevy has commented that charges to cover costs of payment networks are 'inevitable'. The CEO said that while some national regulators have brought legal cases against the group over interchange, the 'mature' thing to do would be for them to wait for the conclusion of the commission's investigation.
'There are...national regulators that have put up cases against us. While we are negotiating with the commission, they should put those on hold'. At the end of March, the EU executive opened an in-depth inquiry into Visa's multilateral interchange fees (MIFs) to assess their compatibility with EU laws. The opening of formal antitrust proceedings covers MIFs for cross-border point of sale transactions within the European Economic Area (EEA) using Visa-branded consumer payment cards. The inquiry also covers transactions under Visa's 'honour-all-cards-rule', which obliges merchants to accept all valid Visa-branded cards, irrespective of the identity of the issuer, the nature of the transaction and the type of card being issued, the commission said. Ayliffe said Wednesday that he does not want to see changes to the rule. The commission said it will investigate whether the fees are compatible with EU laws on restrictive business practices such as price-fixing. The commission adopted an exemption decision on Visa's multilateral interchange fee in 2002 after Visa 'offered substantial reforms'. The exemption expired on Dec 31 last year. Visa Europe is part of the global Visa network. It is an association of 4,600 European banks and financial institutions which pay the group fees for use of its services. In October last year, it became independent of Visa Inc. (NYSE:V) In mid-December last year, the commission ruled rival MasterCard Inc.'s (NYSE:MA) interchange fee payments network within the EEA was illegal. Ayliffe said there is a difference between the cases put forward to the commission by the group and that of MasterCard, based on legal arguments used. He also said each case must be judged 'on its own merits'. The commission concluded the group's MIFs inflated the cost of card acceptance by retailers without leading to proven efficiencies. MasterCard then had six months to comply with the order to withdraw the fees. If MasterCard fails to comply, the commission said it may impose daily penalty payments of 3.5 percent of the company's daily global turnover in the preceding business year. MasterCard has appealed against the decision to the EU courts in Luxembourg. The EU executive said at the time of its decision MIFs are not illegal as such but stressed they are only compatible with EU competition rules if they contribute to technical and economic progress and benefit consumers. The EU executive says the overall payment cards sector handles payments worth 1,350 billion euros a year. Visa said 80 percent of payments made in the 27 member state bloc were made in cash, but added that this is likely to decrease over time in favour of payment cards. The group claims that more than 1 euro in every 9 in Europe is spent on a Visa card. It aims to increase this to 1 euro in every 5 by 2015.