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January 05, 2007
Second Life and Metrics That Matter
If there was one big lesson from the last bubble, it was to understand what metrics meant. Eyeballs, getting big fast, focusing on revenues and not profits, hits. All these metrics bedazzled people. Which is why Clay Shirky has been right to demand that reporters take a more skeptical look at Second Life's numbers to get a realistic understanding of how the service is doing.
He and David Kirkpatrick from Fortune went back and forth on relying on the service's reported 2 million residents numbers, and Kirkpatrick then picked up the phone and called Linden Labs and got new numbers. To whit from Shirky's blog and in comments:
"1,525,670 unique people have logged into SL at least once (so now we know: Residents is seeing something a bit over 50% inflation over users.)
Of that number, 252,284 people have logged in more than 30 days after their account creation date.
Monthly growth in that figure, calculated as the change between last September and last October, was 23%."
It was a good exchange, showing how open debate online does lead to better understanding of what's going on in the tech world. My only quibble is that Shirky's criticism only focused on business reporters, giving bloggers a pass. When the world goes crazy in a bubble, it's not just one segment of the world that pushes it over the edge. The investing public, Wall Street, VCs, the press, and entrepreneurs, big company execs. They all contributed to the hype last time. And if the business press needs to remember to be more skeptical, so do the blogs.
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"My only quibble is that Shirky's criticism only focused on business reporters, giving bloggers a pass."
On the flip side, a number of bloggers - myself included - have been pointing out these issues for months and months. It was at our insistence (along with other SL residents who complained on the forums) that LL even offered up the data that Shirky *missed* while at the same time damning journalists and LL in his first ValleyWag piece.
Some of us took him to task for this mistake over on Terra Nova, where the discussions continue (though Shirky seems to me to be pulling back a bit at this point).
My issue with Shirky is that this seemed to me to be a personal issue. And one remark in particular, posted on TN, seems to confirm my suspician.
Some people have tried to remain objective. I count myself among them. While I've complained for months about the "resident" numbers (and posted corrections on more than a few marketing blogs spreading misinformation), I do not believe - nor have I believed - that Linden Lab is alone in this spinning (Blizzard's World of Warcraft, MySpace, and other sites are, imo, subject to similar scrutiny). Furthermore, months ago I and some others raised the same concern over the monetary exchange figures being posted for SL. From what we've gathered, those are equally misleading (yet no one listens to us; MSM seems to wait for someone of Shirky's stature to bother to pay attention.)
My interest now is in seeing a set of standardized metrics emerge that allow us to make "apples-to-apples" comparisons. Until then, the over-hyped anti-hype is just another flash-in-the-pan MSM story.
Links you might like (all on Terra Nova):
Posted by: csven at January 5, 2007 02:36 PM
Thanks for the background. It's really informative. I haven't followed Second Life at all, so I hadn't realized that there was an ongoing thread about the numbers. I wondered about them in passing, but frankly, that was it. I would hate to think it's personal, though I still think that however this came out, it's really importnat that it did.
Great great point about the metrics. And we'll need good standardized ones even more as the atmosphere continues to get ever more bubbly.
Posted by: Heather Green at January 5, 2007 03:50 PM
MediaVidea blog asks 6 important questions about Second Life.
Posted by: pramit at January 6, 2007 04:23 AM
Hey Heather, great story.
As for the focus of those pieces, I concentrated on the business press for a couple of reasons.
First, this is a story about numbers, and inflated numbers at that. Of all the outlets that could be expected to approach these claims with something like skepticism, the business press seems to me like they should be most up to the task.
Second, the most significant claims for Second Life's future utility have come from the business press -- Forbes told its readers SL had a million unique customers, which is, as I noted elsewhere, three lies in four words. Kirkpatrick of Fortune calls it the future of the internet. And some business weekly whose name I can't remember put SL on its cover.
Third, like it or not, the business press has a special relationship with businesses themselves. Part of reading a blog is learning to apply some sort of internalized skepticism. Bloggers like James Au and Tateru Nino are marinating in conflict of interest, and write press releases masquerading as blog posts, but readers of blogs put less stock in any one blog than in the give and take of claim and counter-claim.
The business press, by contrast, operates with an implicit promise that the give and take of opinion and skeptical examination has happened before an article appears. (Whether you should be held to this standard is a different and more interesting question, but you currently are.)
Because of this (and, of course, because your readership dwarfs all but the best-read weblogs), when the business press gets a story wrong, more people get the wrong information faster and with less corrective discussion than when the weblog world gets it wrong, because, as csven notes above, there are also weblogs getting it right at the same time.
Here's an example: Eric Shonfeld of Business 2.0 posted two mismatched Linden numbers in one short post, and didn't follow up on the mismatch *or even point it out to his readers.* When I called him on it, he complained that it wasn't a "reported" story, as if his readers were supposed to disambiguate between when he was posting junk and when he was posting something he'd actually thought about.
This seems to me to be trying to have it both ways: like a reverse superhero, Shonfeld wants to be able to duck into the nearest phone booth and change out of his Intrepid Reporter costume so he can post any old thing that comes into his head, just like civilians do. This would be fine if he was running Shonfeld's Random Thoughts.com, but he's not. He posting under the Business 2 brand.
For better or worse, the press, and the business press especially, has a model that stands for a certain reportorial probity and applied skepticism in advance of a published piece. Taking advantage of the reader's trust in that model, while abdicating its requirements, seems to me a breach of trust, and it was this breach of trust that animated me in the Second Life story.
Posted by: Clay Shirky at January 8, 2007 06:35 AM
And I've given my answers to MediaVidea. Even Shirky poked his nose in. That guy has a seriously personal issue with SL. A shame he can't be more objective.
Posted by: csven at January 8, 2007 09:46 AM
I'm one of those that dropped off. I checked out Second Life 2-3 times back in November '06 (I flew - fun!). But as holidays and more heated up, I got going more with my First Life. Since then, I have not logged in again on Second Life.
Posted by: David at January 9, 2007 03:07 PM