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Linden Lab, the owner of virtual world pioneer Second Life, is cutting 30% of its workforce, the company announced Wednesday. The privately held company, once a closely watched IPO candidate, has been struggling to attract more consumers to its virtual shores and enticing them to stay.

Observers are bracing for the revenue avalanche that Avatar will generate in its third weekend -- and debating its effect on the industry and what, if anything, it may augur for Tinseltown or the national economy.