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A Virtual World Spawns a Very Real Lawsuit

A group of gamers is suing the creator of Second Life , accusing the company of taking away the plaintiffs’ ownership rights to virtual “land” without reasonable compensation. (Yes, the gamers are suing for something that doesn’t technically exist. But the $5 million lawsuit is very real.) The suit seeks class action status. The complaint, filed in Pennsylvania federal court says that, during the early 2000s, Second Life creator Linden Research and its founder Philip Rosedale promoted commerce and virtual property ownership within Second Life, inducing some 50,000 people to invest as much as $100 million of real money in virtual properties. Citing press releases and media interviews, the suit alleges that the company claimed it would protect members’ rights to their virtual property, and that those properties could be used as a source of revenue for the owners. “What you have in Second Life is real and it’s yours,” the suit quotes Rosedale as saying. “It doesn’t belong to us. We have no claim to it.” (The complaint is peppered with Rosedale quotes, painting the founder and former CEO as the driving force behind the property rights concept.) According to the complaint, Linden distinguished the then-struggling Second Life from other multiplayer role-playing games by trumpeting the idea of ownership. Members paid monthly fees for their holdings that the company likened to property taxes. “Linden made a calculated business decision to depart from the industry standard of denying that participants had any rights to virtual items, land and/or goods,” says the suit. The plaintiffs allege that Linden then quietly changed its contract terms and the language on its website, deleting the ownership concept. For example, a question on the FAQ page that read “Why would I want to own land?” morphed into “Why would I want to have land?” The plaintiffs were never notified of the apparent change in policy – or compensated for the loss of ownership rights. The four plaintiffs are seeking more than $5 million in damages for what they say is fraud and violations of California consumer protection laws. (Why California law? A previous lawsuit against Linden – more on that, later – ruled that Linden’s terms of service are subject to California law.)  The lawsuit comes as the nearly seven-year-old Second Life defied the general trend of decline in virtual worlds, announcing it had a record first quarter this year: Transactions hit $160 million, a 30 percent jump over the same period last year. The company also broke unique user records in March, with 826,000 – up 13 percent compared to last year. A Linden company spokesman was not immediately available for comment. A lawyer from the firm representing the plaintiffs says the case could break new legal ground, defining actual rights in virtual places. “It’s a unique case,” lawyer Robert Bracken of Pribanic Pribanic & Archinaco  told the Los Angeles Times. “It shows how the Internet has come to dominate our lives.” This isn’t Linden’s first time in court over property rights. A much-publicized 2006 case – Bragg v. Linden Research  – was settled out of court for an undisclosed sum (though not before a Pittsburgh judge ruled Linden’s terms of service subject to California law.) In the case, Pennsylvania lawyer – and plaintiff – Marc Bragg claims Linden froze his account and confiscated his assets after a land deal soured. He sought $8,000 in restitution. Second Life – Linden Lab – Philip Rosedale – Law – Los Angeles Times

How to Burn Bridges with Bootup Labs and Other Investors

When Phoenix-based designer Jamie Martin’s blog post hit the front page of Hacker News earlier today, he realized what it’s like to burn bridges in a connected world. After his company Status.ly and three other startups were dropped from the Vancouver-based incubator’s program roster, Martin blogged about the unfortunate incident and put his site up for auction . While Martin at first claimed that Bootup Labs “had no money”, incubator cofounder Danny Robinson fired back with a reply. Sponsor Said Robinson, “This is not how it went down Jamie. After everything that we did for you and Steven, I’m shocked at how you have twisted the truth for PR reasons.” Robinson then went on to issue a press release on closing Bootup’s 2010 round and bringing on WMedia Ventures’ Boris Wertz as a board member and investor. In the past, Wertz has been a Bootup mentor alongside Sun Microsystems’ Timothy Bray, NowPublic’s Len Brody, Garage Technology Ventures’ Guy Kawasaki and Infectious Greed editor Paul Kedrosky. With a heavy hitting roster like this, it’s hard to believe that a startup might bite the hand that feeds it (or at least used to feed it). One of the biggest issues with Martin’s Hacker News submission was the fact that it was originally posted with the title “Moved to Canada to participate in a startup incubator that had no money.” The community outcry against this misleading title made YCombinator and Hacker News founder Paul Graham take note and change it to the exact wording of the original blog post. Now if TechStars , DreamIt Ventures , VentureHacks and LaunchBox would only weigh in, Martin’s post will have been seen by most seed-level investors in the country. The Lesson At this year’s SXSW, Paul Graham estimated that the YCombinator mafia might rival that of the PayPal mafia by the sheer number of incubator graduates in today’s tech companies. If this is true, then startup entrepreneurs should nurture the relationship they have with their investors even if it’s a tenuous one. While Martin’s post received widespread attention and responses from hiring companies looking to interview the designer, he’s definitely set the wrong tone to lure investors on upcoming passion projects. Before venting on a deal gone sour, consider the fact that you want every opportunity to close future deals without being labeled a liability. Discuss

Report: Groupon Valued at $1.2 Billion

The social group-buying site Groupon – which just in December closed a $30 million round at a $250 million valuation – is raising more money at an eye-popping valuation of between $1.2 billion and $1.35 billion, TechCrunch’s Michael Arrington reports .

Microblogging vs. Blogging: 5 Ways to Create an Open Twitter Alternative

Given the recent developments in the Twitter developer ecosystem, I think it’s a good time to revisit the idea of an open Web alternative to Twitter. The fact is, the differences between microblogging and normal blogging are insignificant. I’m going to detail five of the differences. My point in doing so is to illustrate that the best way to bootstrap an open alternative to Twitter is not by inventing a bunch of new technologies or products. Instead, I want to show that most of the pieces already exist in the current blogging ecosystem. With a few modifications, a distributed microblogging ecosystem can easily emerge. Sponsor Guest author Chris Saad is VP of strategy at Echo , the world’s leading provider of comment/conversation technology to Tier 1 publishers. His role is to track trends in the marketplace, listen to and participate in the community and translate those needs into actionable product direction. His background includes co-authoring of the Attention Profiling Markup Language (APML) specification, and co-founding the DataPortability Project . Used by Digg, BBC, NewsGator, France Telecom and others, APML is industry standard for Attention Profiles. The DataPortability project’s mission is to advocate interoperable data portability for users, developers and vendors. Length Microblogs are, well, micro. They are shorter. This is not some marvelous invention – it is a simple, imposed limitation on the input field. Any publishing software today, from Wordpress to Drupal, can be modified to force users to stick to 140 characters – call it “microblogging mode”. I don’t think this particular difference (or how to bridge it) warrants much more explanation. Real Time While blogs used to update rather slowly in a publish and subscribe model, microblogging has had a reputation for being faster or real time. The old school refresh rate of 15 minutes or more (the time between RSS refreshes) seems like an eternity these days. Of course the reality is that the Twitter API is still incapable of sending updates to individual clients in real time, and the whole thing is far from real time. Updates in seconds, however, is a key trait of microbogging. The fact is, however, that blogs now have a method of pushing updates that’s faster and more effective than even the Twitter API. It’s an open standard called PubSubHub and it’s supported by both Blogger, Wordpress, Buzz and countless other smaller services. Blogs are already real time. Identified Subscriptions One of the nice things that Twitter does that traditional Blogging software does not do is called Identified Subscriptions. That is, when you subscribe to (a.k.a follow) a user, their name and face appear in your sidebar, and you get a nice little ego boost in the form of a notification email and increase in your follower count. Why couldn’t we add a simple mechanism to PubSubHub so that when a client subscribes to push updates, it leaves behind some optional identifying information about the user like their name and avatar? Or maybe instead of leaving the actual username and avatar, it might provide a URL to the subscribing user’s own microblogging site that has that metadata stored in the header. Addressability This is perhaps the most complicated difference and gap to close. With Twitter, you can easily say, “Hey @chrissaad you are are a crazy hippy” and I will get it in my message stream. Blogs can’t do that right? Well, actually, blogs have been doing addressability since day zero. The same way the rest of the Web does addressability – using links. Bloggers frequently link to each other and then check their trackbacks and pingbacks for incoming references. The only problem with this model is that it’s not user friendly enough. Mainstream users don’t understand URLs and checking pingback and referrer logs is just plain silly. So rather than reinvent the wheel, why not just add rubber? To make it easier for users, imagine if blogging software kept track of the users you were following (see Identified Subscriptions above) and when you type the equivalent of “@”, they provided a list of suggested aliases to choose from. When you select the person you are addressing, the software could insert the alias and hyperlink the name to the associated URL of that user’s microblogging site. Clients, then, could subscribe to Google Blog Search (remember blog search is essentially the blogging world’s open firehose) and search for any reference to your personal URL. The rest is just presentation tricks to show those replies mixed in with the rest of your microblogging items. Clients Why can’t existing Twitter clients allow users to subscribe to PubSubHub enabled RSS and Atom feeds. They would also subscribe to the Google Blog Search for references to your own URL (for @ replies). No need to rip and replace Twitter, just offer an open alternative: subscribe to any site – anywhere. The Future As you can see here, microblogging is and could be fundamentally the same as blogging in terms of the mechanics and technologies involved. The techniques used to build and improve the open blogosphere could be used to bootstrap a microblogging sphere as well. There have been many big strides in this area, such as Status.net. The opportunity now is for the (ex?) Twitter clients and blog publishing platforms and the standards groups to make small tweaks to extend the technology in the right way. Discuss

Twitter’s Chirp Will Be Streamed Live Online

Chirp , Twitter’s big developer conference, begins tomorrow in San Francisco but if you can’t make it, you can still see all the big announcements, hot debates and whatever else might happen streaming live on the web thanks to Justin.tv . As tech investor Chris Dixon said on Twitter this morning, the Twitter drama that’s unfolding is fascinating because it’s a struggle between a product that wants to be an open protocol and a company that wants a return on more than $100 million in venture financing. You might find that drama interesting, or you might just be excited to see cool stuff get announced. Either way, it’s great news that the rest of the world will get to watch live online. Sponsor Bookmark the Chirp Live page on Twitter or on Justin.tv (for chat). The event begins at 9 am PST tomorrow. Discuss

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