Fortune Magazine
Fast Forward

No, Second Life is not overhyped

Is it a game? No. Is it a marketing opportunity? Yes, but who cares? What matters most is that it may point to the future of the Net, says Fortune's David Kirkpatrick.

By David Kirkpatrick, Fortune senior editor

NEW YORK (Fortune) -- Second Life, the three-dimensional virtual world, has been getting tons of press lately. In the software, which anyone can download for free, you travel around as an "avatar" representing yourself (with a different name), through a huge range of spaces - beautiful natural environments, shopping malls, museums, clubs, homes, apartments and cities. So far, it's signed up 1.3 million members.

It's not a game, it's just a place you go to do whatever you want to do. It has been on the cover of Business Week, on the front page of the New York Times Escapes section and in the coverage of Reuters, which has now assigned a reporter to operate full-time inside Second Life. The Reuters reporter, Adam Pasnick, told CNET that his assignment has caused so many waves he's been getting interview requests from Poland, Colombia, Brazil and New Zealand.

W Hotels has built a prototype of its new Aloft hotel brand inside Second Life. It was featured in the Times, among many other articles. W President Ross Klein told me that while the company originally just wanted to test out concepts, the PR value from all the stories written about Aloft in Second Life has given the company a "hundred-fold" return on its investment, just in positive PR. Even IBM (Charts) CEO Sam Palmisano can now be seen lurking around Second Life.

Yet Second Life may be more important, longterm, than even this much publicity would suggest. That's because what it really may represent is an alternative vision for how to interact with information and communicate over the Internet.

Yes it's cartoony, but one of the great things about Second LIfe is that whenever you are doing anything, you can see the other people who are nearby as well. This brings a dimension of social life - so elemental to how we live our lives offline - to the Internet in a way that up to now the Web has not. In Second Life everything you do is done in a social space, though you can get privacy if you want.

So far Second Life is way too hard to use. The people who do best there are still techie types. It requires a fairly powerful computer. You have to download a special software application to use it. It can't be used in many corporate offices (like mine at Time Inc., for instance).

But Second Life is important as much for what it represents as for what it concretely offers today. Looking at Second Life makes me realize just how much the Web, wonderful and useful as it is, still mimics a print model.

We are all lathered up about the success of News Corp.'s (Charts) MySpace. But the social networks of the future will probably be much more than merely a bunch of Web-site-like collections of data, as MySpace is today. MySpace beat Friendster, the previous champion social networking site, by allowing its members much more freedom in how they created their pages.

Second Life goes much further. It took a radical approach to design from the beginning. It offered itself as a mere platform for the creations of its occupants. Essentially everything seen inside the software today was created by its users.

All that the company that operates Second Life, Linden Lab, sells is server time and network capacity. The more real estate you own, the more you pay. It costs nothing to enter, so you can go in and explore all you want. It's often worth it to own real estate, because you can make real money by renting it out or developing it to resell.

Users pay in Linden dollars, which can be converted to real dollars. Though Second Life has established codes of behavior, and does enforce them, restrictions are minimal. Second Life really is the creation of its residents.

One of the more intriguing aspects of Second Life is that it includes links to content outside. If you go, for instance, to Sony's (Charts) island, you can enter a Christina Aguilera room, and watch her latest video (while your avatar sits in an easy chair, of course). There's no reason why some version of a 3D world couldn't eventually offer as much functionality as we get today on the Web, and more. An interesting corollary - searching with Google (Charts) might be harder. It's completely text-based.

Every day more big companies turn their attention to this new medium, realizing that it really represents something new. I'm now convinced that one day Second Life or something related to it will become a Google/Yahoo/MySpace-scale company.

Maybe Second Life will grow organically to become that company. Or an existing giant striving to stay relevant might buy it. Or maybe somebody will build a different, even better virtual world.

But we're seeing something new and important. If you want to stay abreast of what's happening in tech, you need to get inside Second Life. If you run into David Liveoak, don't hesitate to say hello.


Google moves into virtual worlds

What's next: a Ph.D. in video gaming? Top of page