Following the last weeks, we really need to ask ourselves what is real and what is virtual? (picture Source)
In the real world: Here’s one angle of the Lehman Brothers story (source):
… at the end of every trading day, the Asian and European operations [of Lehman] would remit their (very large) cash float back to Lehman Brothers in New York. That makes sense: it helped to strengthen the New York trading operations during a time when the cash would otherwise be sitting unused. Then, come the weekend, they’d get their cash float back, and continue operations.
Except … before he declared bankruptcy, Dick Fuld decided that Lehman’s Asian and European operations would not get their cash back. Instead, it stayed in the US — where it was bought as part of the Lehman US operations by Barclays.
Maybe all this was necessary, like some kind of medical emergency triage where only one of the triplets can be saved, and you have to put all of your resources into that one. But it’s still easy to see how the Lehman operations in Europe and Asia would be extremely unhappy about it. After all, they weren’t the ones who loaded up on dodgy residential and commercial real-estate assets — to the contrary, they were making lots of money, for themselves and for their parent.
This was just the beginning. AIG got $150 Billion (source), and other financial firms will need to be saved. Lehman was founded in 1850; AIG was (is?) the largest insurance firm in the (real) world.
In the virtual world: This week we also heard that Google is closing Lively — Google’s foray into virtual worlds. Google urges members to make videos and pictures of their creation, in their web page about the shut down. See Longer post here.
In addition, Second Life has lost 1025 islands (from Nov 1). That means the creations of 1025 island owners are gone forever. This is not the first time people shut down their islands. Some of the best creations in Second Life were wiped. (See the amazing Watch the world(s) – revisited story of the lost island of Starry Nights).
Welcome to right sizing. Both in the real worlds and the virtual worlds.
Both the real and the virtual is readjusting to what is really needed and wanted. We will focus on the core things: food, shelter, family, fun.
Firms that create real value will survive and thrive. Google will probably re-focus their “virtual” energy in Google Earth (see for example Google’s work on Virtual Rome). And Second Life?
Well, we will get better user experience with better islands. Hopefully Linden (the God’s of Second Life) will be able to correctly right size — commit their energy’s to a solid virtual worlds experience.
While I may be too optimistic, I see the latest right sizing as good. It will allow the good players to blossom.
Lehman (and sequelae) has nothing to do with right sizing. Sheer greed and lack of ethics are the reasons.
Indeed. and thus the need for right sizing … to make sure such things do not happen again.
Right Sizing is an interesting phrase, as it relies upon the assumption and value of 'right'. Something that may be different for each person. I lost a lot of Second Life Islands as hosted by Linden Labs because they mis-managed the whole show very badly. At a time of depression onset, unfair pricing and bad communications levelled for me, the ability of Linden Labs to supply a wanted product at a reasonable price. For me, after losing several thousand Dollars a month until the profit was eroded completely, my 'right size', was zero.
River: When did you loose the island?