Second Life and Metrics That Matter

Heather Green

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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