Linden Lab founder set to step down as CEO

Second Life is looking for a second wind after a period of rapid growth. Is a new CEO the answer?

Philip Rosedale says that the reasons behind his resignation from the CEO position are due to the company needing a leader with more operational experience. He is not leaving the company altogether -- rather he will serve as chairman of the company after a successor is named.

Mitch Kapor, the current chairman, will also step down but remain on the board. Rosedale will continue to play a big part in development and strategy for Second Life, a Reuters report says.

Linden Labs was founded in 1999 after Rosedale left RealNetworks, where he was chief technology officer. The online world saw steady growth from its inception in 2003 through late 2006, but following several high profile deals late that year to increase the MMO world's visibility, the user base exploded.

Beginning in late 2006 and lasting through the middle of last year, the number of user hours on the service increased fourfold, and concurrent users at any one time tripled. Month on month registration growth at one time peaked at almost 50 percent.

However, growth has slowed dramatically to about 4.6 percent month to month. Additionally, while there are some 12 million users registered, it is believed only about a half-million of them are active on a regular basis.

Much of the trouble with retaining users is attributable to issues that arose from the world's rapid growth, and software that many still consider rather difficult to master.

This presents some serious challenges to any new CEO. On top of that, he or she would be challenged by Linden's corporate culture itself, which is much more decentralized than most companies.

How the new leader of Linden manages to bring the company together while keeping Second Life residents happy will be the answer to whether or not Second Life continues to grow, or is relegated to the status of "just another Internet fad" like so many other services.

Either way, Rosedale will still be a big part of the online world he created. "This is my life's work," he told Reuters in an interview. "I'm not going anywhere, and I'm still full-time on this, probably for the rest of my life."