FT : Second Life Now Boasts 2m Users

Friday, December 15, 2006

It is now impossible to typecast Second Life simply as a clugey 3D world where only hardcore geeks and gamer types hangout.  The virtual world has evolved into a mainstream marketing tool for the real world.  It is a successful demonstration of a brand new monetization model and my guess is that Google is probably eyeing it as a possible next acquisition.  Excerpts from the article in the Financial Times entitled “Virtual mirror on the real world”-

Second Life is a rapidly expanding virtual universe where some of the world’s biggest companies are now promoting their brands and experimenting with business processes…..Earlier this year Second Life inhabitants numbered 200,000.  In the next few days, the population is expected to exceed 2m…..It now has nine full-time staff and 40 full and part-time contractors…to meet the needs of clients such as General Motors, Toyota, Intel, Sun, Diageo, 20th Century Fox and Warner Brothers…..Its graphics can be wooden and cartoonish compared with the latest games, the service can be slow, difficult to navigate and often crashes and its users are technology’s highly literate early adopters.  “What’s being created is a new platform.  We’re maybe at the 1994/1995 stage and the release of Netscape in terms of its immaturity,” says Mr Steiger (co-founder and chief executive of Millions Of Us, a virtual design company) of a world that is seen by some as the model for a next-generation 3D web.

…..This week, it was launching IBM Land, a network of 12 islands leased from Second Life’s creator, San Francisco-based Linden Lab.  Linden restricts itself to providing the land and tools for residents and businesses to create whatever worlds they can imagine and construct themselves.  It also provides a currency exchange for converting virtual Linden dollars earned in-world to real dollars.  Sandy Kearney, IBM director of emerging 3D internet and virtual business, says Second Life’s advanced state and unique components made it a natural choice among the numerous virtual worlds being developed.  IBM is using the islands to test new forms of internal communications, new applications and business models and services it might provide to companies setting up in Second Life.  “It’s a continuation of our business.  We’re using the emotive network approach – we have everything from business meetings with customers and conferences to training sessions and a ‘sandbox’ island where people can work out the bugs on a translation tool,” says Ms Kearney.  One useful way of using Second Life is for “business process rehearsal”, she says.  It can avert expensive mistakes or reveal cost savings in the real world.  “It gives you an inexpensive ability to visualise.  An airline company could create a place where they could look at the process of turning round a plane in 18 minutes.”  In a “real” example, California’s health department has already created a simulation that trains staff in how to set up emergency medical clinics in the event of a biological warfare attack.

…..But most of the activity by business in Second Life to date has been focused on marketing.  “It’s very experimental for a lot of our clients.  They are looking at how they continue to progress from web 1.0 to 2.0 in building a long-term relationship with customers,” says John Squire, head of product strategy at Coremetrics, a provider of online marketing analysis.  Smaller, lesser-known brands are achieving some of the best results at the moment, he says, such as an environmentally friendly outdoor clothing company that has attracted a lot of interest in its mission statement through a Second Life presence.  On a much larger scale, Motorati Island is an ambitious attempt by GM to promote its Pontiac brand.  Stretched across six 16-acre islands, the Pontiac brand is promoted on one with the building of a car dealership and places for people to socialise, such as a night club and concert arena.  The other 80 acres are being reserved for Second Life residents who can earn land for free if they suggest viable car-related projects – one has already built a go-kart track there…..Mr Steiger says the reflection of Second Life in real-world reporting of it and online discussions can provide companies with a return on their investment.  “If the project is set up correctly, it explodes out of Second Life and we see page impressions of 10m to 20m in the blogosphere and similar numbers in the mainstream media – that’s where the return on investment lives.

Reference : http://www.ft.com/cms/s/9233206e-8b8e-11db-a61f-0000779e2340.html

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