It has been a tough summer for businesses who operate in Second Life, be they completely virtual or a combination of real world with a Second Life presence. We all know the routine by now. A cool new technology is launched. The early adopters come onboard and create a user base. Eventually this user base gets large enough to attract the notice of the mainstream press, who jump on the bandwagon and hail the new technology as "the next big thing." That in turn begins to get the mainstream users to check out the cool technology, many of whom will just skim the surface, not quite get the deeper meaning of the solution, and then will move on. But as the mainstream gets onboard, the press accounts begin to shift, and suddenly the "next big thing" becomes the "next big risk" or whatever tabloid like headline will fit. This is exactly the process we have seen with Second Life over the past ten months or so.

By now most of us have heard about the infamous TV spot on a German tabloid news program, which unofficially marked the beginning of the press backlash. The larger story however, are two things. First, the press backlash itself, and its affect on Second Life. Second, what this means for the future. Of course none of us have a crystal ball, and things can change, but I think that business is far from over in Second Life, and indeed, new opportunities are there for those who are entrepreneurial enough to chase after them. Let's start though by looking at the press backlash. Here are some examples of recent negative press coverage:

It all sounds amazing, until you visit Second Life. Walking (or flying) around this virtual universe is a disappointing experience. The strange, dislocated setting and only the occasional presence of anyone are disconcerting. The virtual branded locations that sounded so impressive in the pages of BusinessWeek are basic and devoid of visitors. Despite Second Life's bold claims of millions of residents, the limited server space means locations can handle only 70 avatars at a time. But once you leave the congested entry portal, this is hardly a problem as most of the site is eerily quiet and deserted.

theage.com.au

And this:

Making money by starting a business in the virtual world known as "Second Life" has been touted as an economic wave of the future.

But for the moment at least, pulling it off isn't exactly a reality.

ABC News

Anyway, you get the picture. To be fair, most of the articles portray the issues and opportunities in the correct fashion. The big problem is many of the headlines are overly negative, and the organizations that a few months ago were extolling the virtues of Second Life, are now telling their same audience that it isn't as great as people thought it would be. Okay, fine, but just because the technology doesn't meet the hype doesn't mean that the technology is problematic or doomed. Second Life is very cool technology, and when you think about how complex it really is, it is quite amazing that it works as well as it does. Over time the technology will get better and better, especially as more of it gets open sourced and managed via a community development process. The real problem is our tendency to rush in, make quick judgements, and leave. My advice is if you are want to do business in Second Life, take a long term view and think about where this technology will be in three to five years. Don't judge it just on where it is now. Keep an eye on the developers who view Second Life (correctly IMHO) as a development platform, and keep your toes in the water for now.

That brings me to my second point, what this means for the future. In terms of collaboration, the immersive web is an amazing tool, and Second Life is a paramount example. It removes distance and enables people to feel like they are in the same place in ways that Web 2.0 collaborative tools are unable to do. We create technology to make our lives better, and information technology fosters better communication. Ultimately this is where I see the immersive web shining, as a premier communications tool. It won't replace email or web browsers or Google or any of your current favorite web tools. Instead it will work within that infrastructure and allow you to extend your communications capabilities with customers and business partners. So if you've invested in SL, and so far it hasn't made economic sense, it isn't the tool that is the problem, it may be in how you are using it.

Alice


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