Fast Talk: Getting A (Second) Life

Chuck Hamilton is using Second Life to train new IBM hires. And he looks darned good in a kilt.
By: Fast Company Staff
28 February 2007

Hamilton, 46, heads an effort to train employees across IBM’s businesses in virtual online worlds such as Second Life. Here, he explains how IBM will immerse thousands of new employees in company culture through its virtual doppelgänger.

“A year ago, we were talking about how to leverage play in the business: What could we use to extend our learning environment? Well, Second Life was popular, it was available, and we could use it to experiment. So we built a couple of islands and tried out experiences within them. One of the first was an online ‘jam’: We brought in people from around the world to discuss how they could use this 3-D space to their advantage. They came from India, China, Brazil, Russia. The island got very crowded.

That led us to the Fresh Blue project in China. If you’re an intern, maybe just out of university, you want to learn all those basic things about our culture, and you want to connect with other people. So is there a way we can meet and not have to bring people together physically? We provide a virtual space in which to do that. The interns get up to speed quicker, and they meet people they wouldn’t otherwise meet. And it’s a very low-cost medium.

In the United States, we’re using Second Life to create a mentoring community. So if you’re interested in talking to somebody who has 25 years in the business, we’ve built a connection environment–a social-networking tool where you profile yourself, then meet in Second Life. We have multigenerational workforces, and this is a way to get together, virtually meet, and connect. We’re seeing very senior IBMers swimming and flying next to people who have been in the business 10 months. The only thing I can tell you is, they seem pleased to be meeting this way.”

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Second Voice!!!

Second Life Residents Speak for Themselves
By Walaika Haskins
02/27/07

Second Life creator Linden Lab on Tuesday announced plans to give voice capabilities to residents of the online virtual world, allowing users to talk to people in their immediate virtual surroundings or select individuals for conference calls. The new feature will likely catch on well with Second Lifers, however some may feel it subtracts from the anonymity of the experience.

Citizens of Second Life, the online virtual world, have until now communicated silently via instant messaging and chat. They will soon be given the power of speech. Linden Lab, creator of Second Life, announced Tuesday it will add voice capabilities to the Second Life grid. The new feature is “part of an ongoing drive toward creating a richer, more immersive virtual environment,” according to the company.

“The addition of voice marks a natural progression in the ongoing evolution of Second Life,” said Joe Miller, vice president, platform and technology development at Linden Lab. “We believe voice is a transformative technology that will change the way residents communicate, and will lend more immediacy and dynamism to their interaction with others.

“For example, academic institutions could use the voice feature of Second Life to carry out lectures, corporations could use it for customer training and friends can simply catch up with each other,” he added.

Next week, the company will roll out a limited beta for 1,000 users. That will be followed by a “grid-wide” beta test, which will allow all Second Lifers to try the voice communication feature. Linden Lab plans to unveil the final version during the second quarter of 2007.

The Game of Life

More than simply an online game, Second Life is a 3D virtual world built and owned by its residents. More than 4 million people inhabit the virtual playground and interact with one another using avatars — digital representations of themselves — at the basic level. However, less than 200,000 residents are paying users, Michael Cai, principal analyst at Parks Associates , told TechNewsWorld.

Using a variety of tools, Second Lifers can express themselves creatively by doing such things as building a mansion, designing clothes, and inventing tools and weapons. Since money is a necessity even in a virtual environment, residents can build amusement parks and shopping malls, charge for admission or rent, respectively, and amass a virtual fortune and make money in the real world.

Many online game players spend a lot of time in the virtual world — buying and selling items and creating a strong economic component to what for many is much more than a game, Rob Enderle, principal analyst at the Enderle Group, told TechNewsWorld.

“It is the place to go to see virtual worlds work,” Enderle said. “It has received a lot of coverage and seems targeted at a more mature audience than most of the alternatives, which primarily target kids.”

Business Life

A spate of media attention has increased the popularity of Second Life and other virtual realities. However, the attraction of virtual environments, said Cai, stems from the fact that they are more than just a fun alternative reality for many inhabitants.

“Second Life is definitely becoming popular with all the mainstream media attention,” he said. “Virtual world games are getting a lot of attention because they are not ‘games.’ In fact, they may not be regarded as games by many.”

Several universities hold classes in the virtual world, bringing together students from around the globe. In addition, well-known businesses, including American Apparel, Sire Records and singer Regina Spektor, as well as smaller businesses and nonprofits such as Neo-Realms Entertainment, Crescendo Design and Global Kids, have set up shop in Second Life.

“[Virtual worlds] are also advertising and [promotional] platforms, collaboration platforms, software development environments, online communication platforms, environments for testing new ideas for the real world, virtual sex playgrounds and potentially new content distribution platforms,” Cai continued.

In that context, Cai explained, having voice is very important. Although people who see Second Life as simply a game may not be keen to use their voice because it might “ruin the virtual aspect of the game” for those looking for an alter-ego experience, people who use it as a collaboration and communications platform will definitely value voice.

“Suddenly, Second Life is poised to become a potential upcoming competitor for (VoIP providers) Skype and Webex,” Cai said. “The bigger question is whether the addition of voice support will attract new users to Second Life or its just new value added for existing users,” he added.

Mezza Voce

Integrated voice will be available to all Second Life residents; however, the function will only be available under the auspices of landowners. Owners of private islands and mainland property owners will be able to choose whether to enable voice on their land.

Second Lifers can use the voice chat function in group mode, which allows them to automatically start speaking and enables up to 100 users within their immediate surroundings to hear them. Also available are group conference calls, which give two or more residents the ability to communicate with large groups across “geographical boundaries.” Users who want to engage in a private one-on-one chat can also do so. Initiated by instant message, the private calls can take place on any land, whether it is voice-enabled or not.

The new form of communication will be a boon for those who find texting arduous, Enderle noted. However, he sees problems for others who rely on text messages for relative anonymity and for group communications.

“Personally, I hate having to write everything I’m saying, but some folks like to gender-change, and voice has been a problem for them,” he said. “Also, you can get a lot of people typing and kind of follow along. You get a lot of folks trying to talk at once and both the noise and the latency can drive you nuts.”

Overall, however, integrated voice will add realism to the virtual world and increase the popularity of such sites as more and more businesses and schools take up residence, Enderle stated. Users will also benefit as the number of virtual worlds expands.

“This is all part of evolving the virtual world into something that better mirrors the real one,” he concluded. “We already are seeing other properties pop up and they are derivatives of gaming based MMOGs (massively multiplayer online games) without the game part, like ‘World of Warcraft’ and ‘City of Heroes.’ Another of these is http://www.there.com and there is also Entropia, where they actually allow you to earn real money.”

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AMD In Second Life

AMD Builds Virtual Pavilion in Second Life
By Elizabeth Millard
February 19, 2007

In news media interviews about the Second Life initiative, AMD project manager Paul Nolte noted that the Second Life “metaverse” is a gathering place for new and established developers, and that by providing a place for them to meet, AMD hopes to spur education and further professional growth.

Chipmaker AMD is planning to broaden its developer outreach program and foster a stronger presence in the gaming world by creating an AMD pavilion in the popular game Second Life.

AMD will maintain a display hall and auditorium within the game’s virtual world in an effort to draw more developers into chats about working with AMD on new technology. The hall will have areas for meetings, training courses, and informal networking. AMD also will use the virtual space to present lectures.

The AMD Developer Central Second Life Pavilion is expected to draw both experienced programmers and amateurs alike, and the company will be offering lessons in areas like developing native code for multithreaded applications. The first event at the Pavilion takes place on February 25.

Virtual Action

In addition to meeting in a virtual conference hall, developers and players can participate in a three-month treasure hunt. Second Life residents will be given a series of challenges built using the interactive Linden scripting language. Those who enter will be automatically placed into a drawing for a grand prize of a Dell Dimension E521 computer.

In news media interviews about the initiative, AMD project manager Paul Nolte has noted that the Second Life “metaverse” is a gathering place for new and established developers, and that by providing a place for them to meet, AMD hopes to spur education and further professional growth.

The first event will include members of the Second Life Open Source Movement, who are expected to chat about challenges and benefits to bringing an open-source component to the game.

Virtual Meets Actual

“The great thing about games today is that they’re really wide open in terms of how things develop,” said Julian Dibbell, author of “My Tiny Life: Crime and Passion in a Virtual World,” and a founder of Terra Nova, a blog focused on the social and economic aspects of online role-playing games.

Although there is theft and fraud in the online world, just as there is in the physical world, there is also opportunity for companies like AMD and other organizations to catch the attention of players and developers in a new way.

Other I.T. companies have already set up a presence in Second Life, including Dell, Sun Microsystems, Cisco, and IBM.

“Products and services that crop up in games will continue to change, and more companies understand the value of reaching these audiences,” said Dibbell. “As games thrive and draw more players, naturally there will be more interest in selling to those people, and having a presence in those virtual worlds. Finding developers in these worlds makes a lot of sense.”

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Virtual Design Companies Keep Busy

By ALEX VEIGA
February 25, 2007

LOS ANGELES — When Toyota Motor Corp. wanted to promote its new Scions to young buyers, it turned to one of the growing number of digital design companies doing business in the popular online universe “Second Life.”

The firm, Millions of Us, conjured up Scion City — a futuristic urban island with a dealership that sells the cars and a racetrack where consumers’ online personas can take them for virtual test drives.

“The goal is to build a community in ‘Second Life’ that is really engaged and really excited and really involved,” said Reuben Steiger, 35, chief executive of Sausalito-based Millions of Us.

Designing attractions to capture the attention of those online visitors is becoming big business as major corporations move to establish marketing footholds in 3-D virtual worlds such as “Second Life,” which was founded in 2003 by San Francisco-based Linden Lab.

While it feels like a video game, with cartoonish-looking graphics, computer users easily become immersed in the action via cyber stand-ins known as avatars. Through their animated alter-egos, users can travel the simulated expanse and chat, fly, dance or even simulate sex with others.

“Five years from now, it will be near-photo quality,” Steiger said. “The experience of walking in will be like stepping into a movie.”

“Second Life” now boasts more than 3 million registered users worldwide, and Linden Lab estimates around 1.3 million users logged onto the realm in the past month.

Companies pitching everything from virtual T-shirts to entertainment have followed the crowd.

Since launching in July, Millions of Us has done projects for General Motors Corp., Sun Microsystems Inc., Warner Bros. Records, Microsoft Corp., 20th Century Fox, Intel Corp. and rapper Jay-Z, among others. Other major companies that have established a presence in “Second Life” include IBM Corp., Dell Inc., CNet Networks Inc. and Adidas AG.

Computer users have been gathering in 3-D, virtual environments for years using games such as “World of Warcraft” and “Star Wars: Galaxies.”

Companies behind those games employ their own cadre of programmers and designers to build the worlds from scratch. Users have limited leeway, if any, to modify their virtual behavior or create new objects.

“Second Life,” however, comes with a built-in interface to transform geometric shapes into just about anything, and users can take classes within the realm or use tutorials to beef up their object-building skills.

Those who take the time to learn a more advanced programming language can also write “scripts” that control the movement of avatars or how they interact with objects.

Users have created everything from flying birds to waves crashing ashore by their tropical resort. And they retain the intellectual property rights to whatever they create.

A surprising number of structures within “Second Life” are richly elaborate, with design and function on par with content seen in professionally designed games. The best simulate real-world details, such as landscaping, different textures for brick or marble, and realistic lighting effects.

Many other structures, however, are rudimentary and unpolished. Often they are simple box-like shapes, with few or no objects inside. Some are missing walls or are just unfinished floating slabs.

That disparity in quality is reminiscent of the early days of the Web, when just about anyone with a few HTML skills could make a personal Web site. Companies seeking more compelling presentations often turned to Web design firms.

The same dynamic has fueled demand for 3-D design houses. Dozens of willing developers around the world are listed on the “Second Life” Web site alone.

“Most companies who are doing things in ‘Second Life’ are reaching out to specialist designers to craft their experience,” said Mark Kingdon, CEO of digital marketing agency Organic Inc. in San Francisco.

Creating a virtual destination packed with interactive content takes more than an expert in the digital stitching that keeps “Second Life” together.

Artists, writers, marketing gurus and others are often needed to develop everything from the look and design of a project to event programming within the space that will keep people coming back.

Millions of Us has 13 full-time staffers and a stable of 60 contract artists and programmers it can hire as needed, said Steiger, a former Linden Lab executive. It took his company about 10 weeks to build Scion City.

Steiger said an initial build might cost a client between $75,000 and $100,000. Another $50,000 might pay for six or so events at the site. Monthly support fees could add another $10,000 a month to the cost, Steiger said.

The average cost of a project in “Second Life” for a major company runs in the low six-figure range, Steiger and other developers said.

At this stage, that’s still a relatively modest investment for major corporations, Kingdon said.

“A lot of these companies are treating it as marketing research and development,” he said. “It’s a small, growing audience now. It doesn’t offer the reach of say, MySpace, by any stretch of the imagination.”

Even so, visitors to the branded virtual playgrounds can potentially become far more engaged with a brand than by simply browsing a Web site with banner ads.

“A good campaign, you can expect a lot of people to pick up and use your virtual product for hours,” said Sibley Verbeck, CEO of The Electric Sheep Co. Inc.

Earlier this month, AOL launched an interactive “Second Life” mall dubbed AOL Pointe, where visitors can buy clothes for their avatars, rip it up in a skate park and gather in an amphitheater to watch videos, among other activities.

Like many other companies, AOL sees the site as the next step for the Web, an Internet in 3-D.

“There’s a possibility that this could bring a whole new aspect to computing and to community,” said Adrienne Meisels, AOL’s vice president of new business. “It’s a learning platform for us.”

Washington, D.C.-based Electric Sheep built AOL’s site in “Second Life” and has designed other projects for Major League Baseball, Yahoo Inc., Nissan and Sony BMG Music Entertainment.

The firm, which takes its name from the Philip K. Dick novel that inspired the 1982 film “Blade Runner,” has also worked on projects in other virtual worlds separate from “Second Life.”

In one example, last year, the firm built content for MTV’s Virtual Laguna Beach, the online 3-D hub for fans of the show “Laguna Beach.”

Verbeck, 31, declined to discuss company revenue. But he said it launched about two years ago with only a handful of employees and now has 50 people on staff.

“There’s an incredible amount of demand,” Verbeck said. “Our biggest problem is hiring great people.”

On the Net:

Second Life: http://www.secondlife.com

Millions of Us: http://www.millionsofus.com

The Electric Sheep Co: http://www.electricsheepcompany.com

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Rescuing Search In ‘Second Life’

By Daniel Terdiman
February 23, 2007

With at least a couple hundred thousand users, hundreds of stores, endless commerce and millions of objects, virtual world Second Life is begging for a top-notch search tool.

Yet search is one of the systems most in need of help in Second Life. The latest evidence is the recent selection of a team working on such a system as a finalist in the Second Life business plan contest.

“There’s a lot to be desired in the current (Second Life) search, quite a lot,” said Tony Walsh, the editor of Clickable Culture, a blog about virtual worlds and other online cultures. “We need a Google for Second Life, something that works quickly and produces intelligent results.”

Some might wonder how important search needs to be in a virtual world. But as the number of Second Life stores, places and objects explodes, it is becoming crucial that users be able to find what they need without trying keyword after keyword. And while that dynamic is more true today than ever, many people feel the search system has been insufficient for years.

And Second Life is not alone. Other online games and virtual worlds suffer from the same limited tools, say those familiar with environments such as There.com and World of Warcraft.

“The built-in search functionality (in online games) can be rudimentary and somewhat frustrating,” said Ron Meiners, an expert in online games and virtual worlds. “I think the problem is in part that we are still discovering ways to organize information in these worlds that is effective and meaningful. Aside from simple text searches, it’s hard to define what a user can be looking for. It’s one thing to say a dance club, but you really want to know other things, too: How many people are there, age ranges perhaps, or what music is playing.”

That’s why organizations like Electric Sheep, the largest of a growing number of third-party companies that build projects and software for Second Life, are putting a significant amount of effort into trying to solve the search problem in that virtual world.

The complexity of Second Life has gotten to the point where better search is a requirement, much like it was on the Web in the late 1990s.

“One of the problems that you have with virtual worlds is that you want to know where to go, whom to meet and what (to) do,” said Giff Constable, the general manager of Electric Sheep’s software unit. “People are looking for things to explore, and that’s a huge information flow within Second Life that’s extremely inefficient. I almost feel that within Second Life right now, if you do want people to discover you, it’s like throwing a dart at a dart board made of cement. It bounces right off.”

Linden Lab, the publisher of Second Life, also recognizes its search tools are not up to snuff, and says it is working on updating them.

“It is time to make search in Second Life really work,” Linden Lab CTO Cory Ondrejka said in an in-world town hall meeting last December. “We are in the early technical and interface design period on search, but expect to be hearing more about it in (the first quarter of) 2007 with a goal of rolling (out) new search in” the second quarter.

Linden Lab would not divulge any details about its plans for new search tools.

But Constable said he has been spearheading a search project that is likely to bear fruit sometime in the next couple of months. And that’s in spite of the fact, he explained, that anyone besides Linden Lab trying to create a new search tool for Second Life faces the obstacle of not being able to directly access the virtual world’s database of people, objects and places.

Electric Sheep’s probable approach to solving search in Second Life is a work-around. Constable explained that one idea he’s trying is to employ an automated bot to gather data.

The bot would “basically crawl the (Second Life) grid and then figure out what we want to pull, what we want to save,” he said, “and what we want to keep of the data.”

Ultimately, he explained, the idea is that the aggregate data collected would give Electric Sheep enough to provide users with a searchable database, one that while not as complete as what Linden Lab could offer, might be better organized.

Another approach could be that of Mario Gerosa, an Italian journalist, and Laura Cassara, an Italian architect.

The two teamed up to create a proposal for the Second Life business plan contest that was chosen as one of four finalists.

Their concept, Gerosa explained, is based on the idea of Second Life users weighing in on the places and objects they encounter, rating things as they come across them, and having all the resulting data be organized into a searchable system.

Cassara said that their system begins with a set of predefined places and things that when encountered by users, offer alternative choices based on their ratings and preferences.

Then, she said, the system asks each user to rate the things they come across, each of which gets added to the database.

“So we quickly get a database with ratings and associations,” Cassara said. “All of this is based on crowd-sourcing.”

Still, while several projects are aimed at making search better in Second Life, it’s hard to know how optimistic to be.

But there’s no doubt that Second Life users want a search system that works as well as something like Google.

And now that Linden Lab has made the Second Life client software open-source, a decision which allows anyone to make improvements to the existing system, Walsh thinks that the ultimate solution could come from anywhere.

Regardless, he thinks that a solution is necessary.

“Second Life by its nature is a place where every object is already tracked, so it’s a shame not to be able to find exactly what we are looking for,” Walsh said. “I don’t really want to wander around a virtual mall actually browsing the shelves. I’d rather type in a search query and get a smart list of matches.”

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Unitrin Insurance Opens Second Life Biz

Unitrin Direct Gets a ‘Second Life’ in Virtual World
22 February 2007

VISTA, Calif., Feb. 21 /PRNewswire-FirstCall/ — With today’s opening of its cyber skyscraper, Unitrin Direct has become the first auto insurance company to own a virtual office building in Second Life, the popular online 3D world.

“Unitrin Direct takes pride in using the latest technology to offer outstanding auto coverage at a great value, so having a home base in Second Life is a perfect fit,” says Brian Crumbaker, senior vice president, operations and claims. “This is a fun way for us to reach out to our customers.”

To celebrate its first day of operation in Second Life, Unitrin Direct will sponsor a free, online concert on February 27th at The Infinite Mind sim, which Second Life residents can find by using the map or places search. The show will go from 4 to 9 p.m. PST and feature five musicians: Flaming Moe (4-5 p.m.), Mel Cheeky (5-6 p.m.), Cylindrian Rutabaga (6-7 p.m.), Ricardo Sprocket (7-8 p.m.) and JueL Resistance (8-9:30 p.m.).

“This is a fast and easy way for Second Life residents to get a free quote and compare Unitrin Direct’s affordable rates on our dependable car insurance,” says Tom Mercer, vice president, marketing. “We are excited to offer a new way to introduce customers to our direct business model, which allows us to reduce overhead and pass on the savings to consumers while still providing first-class service.”

Visitors to the Unitrin Direct online office will be offered a free cyber souvenir: a miniature of the skyscraper that can be taken and placed on any land they own in Second Life. Like the big building, which is a replica of Unitrin Direct’s Chicago-based headquarters, the miniature is equipped to provide instant car insurance quotes.

Second Life is a 3D online world with a rapidly growing population from 100 countries around the globe, in which the residents themselves create and build the world which includes homes, vehicles, nightclubs, stores, landscapes, clothing, and games.

The Second Life Grid is a sophisticated development platform created by Linden Lab, a company founded in 1999 by Philip Rosedale, to create a revolutionary new form of shared 3D experience. The former CTO of RealNetworks, Rosedale pioneered the development of many of today’s streaming media technologies, including RealVideo. In 2006, Philip Rosedale and Linden Lab received WIRED’s Rave Award for Innovation in Business. Based in San Francisco, Linden Lab employs a senior team bringing together deep expertise in physics, 3D graphics and networking.

Second Life(R) and Linden Lab(R) are registered trademarks of Linden Research, Inc.

*Average savings based on new customers who reported a savings between March and June 2006.

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Study: Virtual Men Are Standoffish Too

by Peter Svensson
Wednesday, February 21, 2007

Males stand further away when talking to other males in the virtual world of Second Life and are less likely to keep eye contact, according to a study that shows at least one aspect of human behavior carries over into the virtual realm.

The study led by doctoral student Nick Yee at Stanford University found that male “avatars,” or three-dimensional representations of Second Life players, stood on average 7.7 feet away from each other, compared to 6.9 feet for mixed-gender pairs — measured, of course, in the virtual scale of Second Life.

Female-female pairs stood only slightly closer to each other than male pairs, but were more likely to maintain eye contact.

Avatars of all genders were more likely to look away from each other when standing close, much like people in the real world face away when crammed into an elevator.

The results, published in the latest issue of the journal Cyberpsychology & Behavior, indicate that interaction in virtual environments, such as Second Life, “are governed by the same social norms as social interactions in the physical world,” according to the authors.

Second Life is a three-dimensional virtual world, superficially similar to many computer games, where users have great freedom to shape their virtual representations. It is run by San Francisco-based Linden Lab.

Yee’s research assistants used a small program that took “snapshots” of the environment in Second Life, collecting data on the relative distance of hundreds of avatars, how they were facing and if they were talking. Genders were deduced from their names, which excluded many androgynous avatars. The distance and gaze comparisons looked at avatars within 12 feet of another avatar — generally taken to be the upper limit of “social” distance in the real world.

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Dutch Demand Ban Of Virtual Child Porn In Second Life

By Jan Libbenga
Wednesday, 21 February 2007

The Dutch prosecutor’s office is considering legal actions to test the law against child porn in the popular virtual game Second Life. With no clear litigation, it is difficult to act against perpetrators.

Kitty Nooij, who is in charge of the sex offences portfolio at the prosecutor’s office in the Netherlands, told Dutch news show Netwerk (http://www.netwerk.tv/#) that she will try to bring cases to court so precedents can be set.

Linden Lab’s Second Life is an online digital world with almost three million “residents” claimed by the company. Some areas of Second Life allow adult members to have virtual sex with others who pretend to be children.

Experts, such as psychologist Jos Buschman of the Van Mesdag clinic in Groningen, say Second Life is “by definition a school for paedophiles”, despite the fact that adult members like to roleplay as children. Second Life requires all players to be adults.

Virtual child pornography has been a criminal offence in the Netherlands since 2002. However, there is no litigation related to virtual sex with virtual children. Today, at least four political parties in the Netherlands demanded a ban on virtual child porn roleplay.

Discussions about virtual child porn in Second Life already started three years ago with the introduction of an avatar called Sasami Wishbringer, who has the body of an eight year-old. Lately, there are more serious reports about adult players with child avatars soliciting (paid) sex.

Last year, Robin Harper, Linden Lab vice president of community development, wrote in a posting on the official Second Life forum, that “if Second Life has evidence of child pornography or abuse that involves children in the real world, it will act to protect the child and notify the authorities”. However, virtual roleplay is allowed.

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Second Life Kaffeeklatsch Series Gets Off To A Brisk Start

By Mitch Wagner
February 20, 2007

This morning’s kickoff kaffeeklatsch in Second Life was a success, with a small but high-quality group gathered to discuss doing business in-world, and drink virtual coffee (as well as a bit of absinthe). Join us Friday morning at 7 am Pacific time when the suggested topic will be managing growth. People are signing up by the thousands — can Second Life keep up?

We’ll hold the discussion for one hour instead of the two hours we had today, just because two hours, twice a week is a lot of kaffeeklatsching. So come on down to Notre Dame de Caffeine or my colleague, John Jainschigg of Dr. Dobb’s Journal, who’s known as John Zhaoying in SL.

And to keep up with what InformationWeek is doing in Second Life, join our SL group. Second Lifers can find it by using the in-world search.

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A Winning Business Plan For ‘Second Life’

By Daniel Terdiman
19 February 2007

The winner of a business plan contest in Second Life is a company that’s likely to help others come up with business plans for Second Life.

The honors, announced Monday, went to Minnesota-based Market Truths, which devised a market research and analysis system to help real-world companies figure out what works and what doesn’t in the burgeoning virtual world.

The contest’s judges rewarded the Market Truths submission because the team has conducted similar market research in the real world for years, and because it appeared to have the best profit potential of the four finalists.

“I was really impressed by the quality of (all) the ideas we received,” said Susan Wu, a contest judge and a venture capitalist from Charles River Ventures. “Each one of these businesses could turn into a viable ongoing enterprise, not only in terms of Second Life, but as a service that stands across multiple virtual worlds.”

The other finalists in the first-ever business plan contest in Second Life submitted proposals for a reputation-based search engine, an in-world music distribution system and a suite of in-world communications and collaboration tools.

Wu said she voted for the Market Truths team–led by its managing director, Mary Ellen Gordon–because of its real-life market research experience and the likelihood that the team would be able to extend that experience into the virtual arena.

“I personally favored Market Truths because they had the best execution,” said Wu. “It seemed most likely that they would be able to execute on their idea (and) the fact that (Gordon) already has experience doing this.”

The contest, which launched in November, sought creative business plans with real profit potential. It was sponsored by The Electric Sheep Company, the largest third-party creator of projects and services in Second Life, and global public relations firm Edelman.

The Market Truths team will receive free access to a private Second Life island for six months, as well as a prize of 350,000 Linden dollars, the in-world currency–about $1,308 in U.S. dollars.

The proposal was for a system in which Market Truths would conduct regular focus groups, as well as surveys and other market research in order to determine the kinds of things that members of the Second Life community like and don’t like about brands, products and services from third-party companies.

The research and surveys will provide analysis based on Second Life users’ real-life gender, in-world gender, real-world age, time in Second Life and other factors. That will give Market Truths clients the opportunity to gauge users’ attitudes based on a number of demographic factors, including the unusual ones that come up in a virtual world where a participant can take on any personality, gender, race, age or size they wish.

Gordon said her team will conduct focus groups inside Second Life and has already been doing so. Market Truths, she said, has been signing up Second Life users to participate in the studies who are being paid a nominal fee–in Linden dollars–and are required to have been in Second Life for at least 30 days in order to ensure that they have some investment in it.

For Market Truths’ customers–potentially large corporations considering whether to set up shop in-world, following in the footsteps of companies including Toyota, General Motors, American Apparel and Starwood Hotels–Gordon said the idea is to provide information about how Second Life users will react to their brands, their products and their services.

Further, Market Truths’ services will allow companies to market-test prototype products and to assess how Second Life users will react to them.

To the judges, the fact that Market Truths can help its clients evaluate how the Second Life community will respond to products, brands and services is an invaluable and potentially lucrative business.

“People will pay them a lot of money, so…it’s a really good business,” said Jon Goldstein, a contest judge and partner at Catamount Ventures, an early investor in Second Life publisher Linden Lab. “Another thing we considered in this contest is the effect on Second Life and its community…What (Market Truths is) going to be doing is working with big companies and helping immerse them in Second Life, and that’s a great for getting more people involved and educated about Second Life.”

Another finalist was the Italian team of architect Laura Cassara and journalist Mario Gerosa.

The two have created a concept for a search engine to allow the virtual world’s users to more easily locate the kinds of places, stores, clubs and other things that interest them.

The idea is based on the reality that the built-in Second Life search functionality is fairly rudimentary and has little or no contextual utility. Instead, it searches purely on keywords.

But Gerosa and Cassara have come up with a system that would allow users to find things based on their preferences and on quality.

That means that as users discover new objects, places and the like in Second Life, they would be able to rate them and in the process create a “quality atlas.”

The result would be something akin to Amazon.com’s recommendation engine, in that as users find things, the engine would suggest other places or objects in Second Life or even, potentially, outside the virtual world.

Wu said she thinks the system would make a potentially profitable business but is not as well-developed or unique as that of Market Truths.

“Unless you’re Linden Lab or you have experience doing search,” Wu said, “you probably don’t have a very defensible strategy if others enter the market.”

And Wu added that it is inevitable that there will be significant competition in the Second Life search market in the near future.

The third finalist was a team of three from Turkey that created a system for distributing music throughout Second Life in something of an iTunes model.

The idea, said team member Ozgur Alaz, a trend scouter and ad planner from Istanbul, is to provide owners of Second Life venues–clubs, stores, theaters and the like–with jukeboxes through which could play digital music that anyone listening could then buy.

The business model for the idea, said Alaz, is to share revenue with the venue hosts as an incentive to place the jukeboxes in their locations. The team said it would try to find partners among the major recording labels in order to gain access to their catalogs of music. Songs would cost roughly the same as a song from the iTunes Music Store.

The last finalist, a team of three from the Seattle area called Metaverse Technologies, has created a suite of communications and collaboration tools intended to give enterprise users a way to use Second Life for business meetings and other important gatherings.

Jacob Sullivan, a Metaverse co-founder and an electrical engineer, said that his team would provide clients with tools along the lines of PowerPoint, interactive whiteboards and other presentation tools that could be used in Second Life.

The team imagines that businesses as well as educators would find the most use from the tools, but individual users might also want to buy pieces of the suite.

For Goldstein, the four teams represented the idea that Second Life can and will be a useful medium for those looking for new ways to build businesses and make money. And as a result, he said, the future of Second Life as an entrepreneurial environment is rosy.

“I think the competition is a great idea,” said Goldstein, “and I think it’s further validation for what’s going on in Second Life, which is a platform to enable creativity and entrepreneurship.”

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