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When all else fails, deny, deny, deny. Philip Rosedale, the founder of Linden Lab, is spitting in the face of Wired's recent exposé on the desperate state of Second Life, his company's virtual world. The magazines reported that advertisers are abandoning the thinly populated virtual world after discovering they've been taken in by the hype. But Rosedale told attendees at the recent AlwaysOn technology conference that, in fact, Second Life is just getting off the ground. We'll grant Second Life this much: Flat on its back, it has nowhere to go but up.

The proof? Look no further than the nonsense Rosedale successfully peddled to Business 2.0's Jon Fortt. Playing to the magazine's love for entrepreneurs, Rosedale pointed out that there are 830 Second Life residents earning more than $1,000 a month, and there are more than $1.3 million worth of interpersonal transactions a day.

Of course, those statistics almost certainly don't include the devastating effects of Second Life's recent ban on gambling. And they certainly don't seem to have anything to do with Second Life's lucrative land sales to big U.S. corporations hoping to advertise int he virtual world.

And to that, Rosedale says, never mind the U.S. We're big in Japan! That may be true, but it's likely just due to the temporary wave of attention surrounding Second Life's launch of a Japanese-language version.
Japanese newspaper Yomiuri Shimbun has uncritically reprinted Linden Lab's estimate of 27,000 "heavy" Japanese users.

Despite the Japanese influx, the number of "heavy" Second Life users — about 490,000 — fell by 2.5 percent from May to July. That's not a fact that Rosedale highlighted. But it's one that, if he were building a business on anything but hype, he might want to explain.