Businesses look to online world Second Life to create virtual enterprise

Source: Exec Digital UK

Date :16/01/2008 09:19:45

Real-life companies look to expand their enterprises by doing online business on virtual world second life. Exec explores the user-defined world and its first dollar millionaire Anshe Chung.

By James Hurley & Sam Wright

When Internet based SL hit the headlines in the mainstream media in late 2006, it made some heavyweight businesses prick their ears up faster than you can say ‘monetize’.

Virtual world, real economy?

SL is much more than a game; as with Mike Oldfield’s concept, there are in fact no ‘winners’ in the conventional sense of the word, no levels, end strategy or points system.

Instead, it’s a user-defined world in which people can interact, play, and even do business.

Crucially, Second Life’s virtual currency, the Linden Dollar (otherwise referred to as the Linden, or L$) is exchangeable for real world currencies in a marketplace consisting of residents, SL founders Linden Lab and an increasing number of real life companies.

Anshe Chung

In November 2006, an avatar named Anshe Chung (Ailen Graef in the real world) became the first ‘online personality’ to achieve a net worth exceeding one million US dollars from profits entirely earned inside a virtual world.

The online business that Chung has established has numerous platforms, including development, brokerage and arbitrage of ‘land’, items and currencies. Her business employs 60 (real) people, has received venture capital investment and is branching out into other virtual worlds.

Virtual commodities

While Second Life’s figure of around $900,000 being spent every 24 hours is undoubtedly impressive, closer inspection of the figures is revealing.

In November, just 154 people made more than $5,000 dollars in SL. Yet the fact that virtual commodities can be bought and sold in the game for real world financial gain makes SL a radically different proposition from other online trailblazers such as Facebook.

A firm such as Reebok can pay a monthly fee to own real estate in the virtual world, and recoup some of its costs by selling shoes there.

Virtual office

While the branding advantages a firm like Reebok or Nissan can establish through SL are obvious, why would a medium sized law firm like Simpson Millar want to be there?

“As a provider of legal services, it is important for us to be as accessible as possible to our clients and potential clients. While many clients still prefer more traditional routes to access these services, there is a growing body of potential clients that want to benefit from the convenience and instant nature of the internet,” says Craig Jones, Operations Director of UK solicitors Simpson Millar.

“Failure to recognise that and to explore the opportunities that technologies such as Second Life offer is to ignore the needs of that growing body of potential clients,” says Jones.

Companies in SL may soon be forced to consider some interesting issues already familiar to real world employers.

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