Research firm Gartner has a new report which delves into the topic of Virtual Environments and Security. In the context of this blog, virtual environments are typically discussed as 3d virtual worlds, however a more accurate description of virtual environments are social environments in which 3d can be part of the platform.

It is with this description in mind that we are analyzing the Gartner report, and is the description which applies to all of our work.

For example, we view Second Life as a virtual environment instead of viewing it as a 3d game or 3d virtual world. While all of those apply, we view Second Life as a set of integrated social applications (3d, chat, messaging, forums, etc.) which taken together as a whole provide a full collaborative experience. The experience can be in real time, asynchronous, audio, video, text, or 3d. It just so happens that the primary interface to the Second Life community is via the SL client "browser" which is an immersive 3d experience. However the fundamental characteristics of Second Life are that of a social collaborative platform.

So whether we are thinking about Second Life, FaceBook, or even MySpace, the following thoughts from Gartner are applicable. According to Gartner research director Andrew Walls, virtual environments cannot realize their potential for collaboration, customer interaction and information processing without improved security. According to Gartner, social networks, virtual worlds, and real-time mapping services are examples of some of these environments in which organizations, staff, and vendors will require tools and and new business practices put in place to protect personal and corporate data.

According to Gartner:

Improved security in virtual environments should be a joint responsibility between individuals, companies and service providers. Social software services currently provide very few user-controlled security features and do not provide users with complete control of the life cycle of uploaded data. The security risks currently posed by virtual environments include privacy and IP management, especially as users upload and create information that is stored and traded remotely. Emerging threats from virtual environments include new social network analysis tools that allow easy integration of data from a variety of sources and potential flaws in user interfaces and media formats such as QuickTime, AVI, and mpeg4.

Over the past several months, much of this has been apparent in Second Life. We've seen QuickTime security flaws, we've seen content theft via malicious automation (e.g. copybot), and other mechanisms. We've also seen the traffic system gamed by the use of zombie bots, which have the effect of stealing money from businesses who post advertising and rent business space on sims that are supposedly popular, but are in fact nothing more than a scam. These are some of the security issues that need to be dealt with (although the new Search capability in SL is relying less on traffic, so it remains to be seen if the zombie scam continues to be effective).

Nonetheless, Gartner does view the emergence of virtual environments as inevitable:

Gartner predicts virtual worlds, social networks and mapping environments to merge into highly integrated online environments over the next ten years. Organizations cannot block social networks and virtual worlds, because they will become the base infrastructure for business and personal interaction in the future. Now is the time to build security tools and infrastructure that enable the organisation to benefit from them. Organizations should start now to gain familiarity with virtual environments, review license agreements of sites used by staff, establish security infrastructure controls, and a usage policy, educate staff members, monitor use and assess compliance.

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We've compiled some stats on the area of digital advertising, which is a space largely owned by Google, but is also changing as social networks begin to expand and take hold. Added to these changes are the rise of 3d networks such as Second Life, IMVU, and others, which at present are outside of Google's realm, and perhaps not often thought of as being part of the digital advertising landscape, but nevertheless are increasingly showing some marketing value (albeit carefully thought out).

To get a sense of the size of this market, we turn to IDC, who says that web oriented advertising revenue will increase from ~$25 billion in 2007 to ~$51 billion in 2012. In addition, revenue for web based video advertising will increase from ~$5m in 2007 to nearly $4 billion by 2012. In short, this is a very lucrative area.

Now, let's compare IDC's estimates with the revenue for traditional media advertising. This includes TV, radio, and such. For broadcast media this particular area shows a small 0.6% in aggregate for q1 2008. The numbers are:

1.7% increase for TV

4.5% decrease for radio

5.2% decrease for newspaper ads

.8% upside for magazine ads

What's important here is the trend - web advertising revenue is increasing and broadcast advertising revenue is flat or decreasing.

In terms of digital advertising, there are five main areas to look at:

1. Banner ads (the grandaddy of digital advertising)

2. Search advertising (where Google reigns supreme)

3. Social networking advertising (which is where we will place Second Life for now, but of course this is primarily MySpace, Facebook, LinkedIn, et al)

4. Affiliate marketing (made popular by Amazon, but quickly becoming an e-Commerce phenomenon in general)

5. e-mail Marketing (spam notwithstanding)

Now the interesting thing about all these areas if that the growth in them is very healthy. Banner ads are expected to hit nearly $6b in revenue this year for example. Search advertising is expected to do even better, at approximately $11b in 2008. The newcomers, such as social networking, are expected to come in at just over $1b in 2008. So advertising on the web in aggregate is a great place to be.



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Here's an interesting view of Google's Lively, the three dimensional immersive platform recently launched to much fanfare. The assumption most people make is that Lively is aimed at competing with Second Life. This assumption makes sense, at least on the surface. Both platforms are real-time, 3d, web based (in the case of Second Life, a specialized client side "browser") platforms. Obviously Google has its sights targeted at Linden Lab and is preparing the torpedoes, right? Not so fast, maybe there is a different reason for Lively.

According to Gartner, there is. Namely, Google is aiming at MySpace and Facebook integration area. Google has certainly made attempts in the social networking area with Orkut, so we know they are interested in the social networking space. But how does Lively fit? While the initial assumptions were that it is intended to compete with Second Life, the implementation is more like IMVU. But Gartner has this to say:

Lively slots into the low end of the spectrum of virtual world offerings, between two-dimensional social networking sites like Facebook and MySpace, and the teenager-oriented social networking virtual worlds of Habbo Hotel, IMVU and even Club Penguin. Gartner expects Lively to be a formidable competitor to all of these sites, though Google's offering breaks little new ground in virtual worlds. We believe this could mark the start of a transition to a new kind of three- dimensional social Web. Nevertheless, it is too early to predict whether Lively will gain market traction.

The ease of integration with social networks would appear to make access easy, but this sector focuses as much on people and communities as it does on technology. To succeed, Lively must build a substantial and loyal user base by enticing millions of users (and their friends) away from their current haunts. That will pose challenges even for a company with Google's reputation and resources.

That perspective makes a lot of a sense. Whereas Second Life and OpenSim offer the capabilities of a full immersive experience, Lively doesn't. We don't see Lively having any impact, for example, on Enterprise 2.0, certainly not in the way that SL and OpenSim will. It's primarily a consumer move at this point. From a business and marketing perspective, there are some opportunities to create themed chat rooms, but the interactions will not be as deeply detailed as they are in Second Life. In terms of competition to Second Life, OpenSim is still the main threat.



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