C|Net reports that Linden Lab has received additional funding. Although the assumption is that this money will go entirely to Second Life, there’s been plenty of speculation that the company is working on another project – a successor to Second Life – which would both improve on the shortcomings of SL and position the company for potential/expected competition. I suppose funding could go to both. Time will tell. But for now, here’s a piece from the C|Net article (Link):

Linden Lab, the publisher of the popular virtual world “Second Life,” announced Tuesday an $11 million round of funding led by Globespan Capital Partners.

The new funding, which comes on the heels of an $8 million round in October 2004, came from Globespan as well as Amazon.com founder Jeff Bezos, Lotus founder Mitch Kapor, the Omidyar Network and Catamount Ventures.
…
For now, the company isn’t profitable, and it’s not clear when it will be, said Catherine Smith, Linden Lab’s director of marketing. However, she told CNET News.com that Linden Lab plans to use its new funding for aggressive international expansion, as well as for hiring intended to boost its infrastructure.