Linden Bets on the Desire for Virtual Things

Virtual worlds have had some real problems. Google (GOOG), for instance, recently shut down an animated environment called Lively only five months after it was announced. And Linden Lab, whose Second Life online community was once front-page news, has neither reached many mainstream consumers nor created an important meeting place for corporate users.

But the San Francisco company is far from backing away. The latest bet: that users will pay real money for things that only exist “in world,” as Second Life fans call it.

Linden Tuesday night announced that it has purchased two small companies–Xstreet SL and OnRez–that act a bit like Amazon.com (AMZN) in providing one-stop shopping for virtual goods from other merchants. One component of their strategy has been to make it easier to buy goods through the Web, not requiring users to enter Second Life to acquire the items they may use there. Financial terms are not being disclosed.

Read the rest of this post