And straight from the horses mouth its pseudo presence tells us the reason
So what happened? Is Second Life dying? No, but the buzz is gone. For all the sound and fury over recent price hikes and layoffs at Linden Lab, Second Life has a community of fanatically loyal users. Since Linden Lab derives its revenue from user fees, not advertisements, Second Life is much more likely to survive the Web 2.0 shakeout than most other startups.
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