2.05.2007

New Website!

I am happy to announce that we have finished our new website and I am moving the blog. We have all kinds of information and resources at the new site: white papers, forums, knowledge base wiki, product info, recent news, and of course our blog. Please come join us as we continue to explore the imerging i3D.

WWW.METAVERSETECH.COM/wordpress/


1.24.2007

The Truth of the Matter

Today I found referenced on Slashdot an article in which the author compared Second Life to a Pyramid Scheme. At first I wanted to dismiss the premise outright. I mean, the cited source was Valleywag, which is slightly better then a supermarket tabloid, but the author promised ‘financial analysis’ of their conclusion. So I read on, and tracked the article back to the full version written by Randolph Harrison. Now I have never heard of Mr. Harrison before, but anyone who has a dual MBA from UC Berkley and Columbia in NYC deserves a careful review. Unfortunately, I have to say that I am disappointed with his characterization of Second Life. I did not find any of his criticisms untrue, but just surprising in the significance that he associated with them. So I have pulled a few of them out for our own review.

The first problem we encountered was one of counterparty risk. Yes, you are absolutely correct. Right now Second Life is the wild west of commerce. Just because you can reach it within minutes of logging into your computer does not make it any safer then the emerging markets of faraway places. I have heard of stories of manufacturing plant managers in China running one location for one employer, while they are redirecting shipments of materials down the street to the facility that they themselves have started up. Things are improving, just as they will in Second Life, but I hear CDs are still pretty cheap on the streets of Beijing. Volatile disruptive markets are messy, if they were already regulated to death there would be little potential for explosive growth. Especially exploring what Mr. Harrison calls “the appearance of a virtual ‘securities and exchange commission’, virtual banks, virtual currency exchanges, and even virtual venture capitalists and REITS.” He himself points out that these institutions are run by individuals and not Linden Labs. Not to be glib, but do you also buy stock from spam email links that litter you email?

Although he eventually concedes that despite this risk factor he was able to make a good return on his investment, he was unable to remove at one time significant amount of the capital gained.

Enter the second problem, the L$ exchange markets are effectively rigged. In a nutshell Mr. Harrison was put off by the fact that the exchange system effectively prevented him from removing more then a few thousand US dollars at a single clip. Thank goodness it does. This is an incredible new developing market, and requires significant influx of cash to fuel its rapid growth. Now I am for open markets, and the article points out that the exchange “is actually not a virtual currency exchange market so much as it is an open auction”, but his problems sound like a free market self regulating effect to me. The rate system prevents destabilizing and totally destructive transactions larger then the market can handle at this point.

I think that there is potential for all of Mr. Harrison’s criticisms to be resolved in the future, and Second Life has the capacity to grow to meet his expectations, but it is just beginning. If you look at the statistics provided by Linden Labs, there are less the a hundred individuals making more the $10,000 US a month. Now that number looks like it is doubling every month, but it is still relatively small. In the end, all we can do is wait and see. I, myself, am not waiting on the sidelines. You can find me and mine setting up shop in Big Mushamush region of tomorrows 3D Internet. See you all there, eventually. :-)

1.10.2007

Ads in Second Life

To many of the big companies entering into Second Life, their entire presence in the 3D world is a form of advertisement. I assume that was a common mindset when the Internet first came about a decade ago. Everyone could have a web page, and it was like a 24/7 virtual billboard. It took a few years for the web to develop into something more functional then information delivery only, and eventually the concept of advertisement as a viable revenue source developed. Don’t get me wrong, email ads and annoying banners have been a way of life for the 2D virtual world since almost the beginning, but as a source of revenue it took a little while. It wasn’t until targeted ads with the backbone of AdSense and AdWords, courtesy of the Google empire, that the Internet maximized the ad model.

Now consider Second Life again. We have the Linden run classified system, a primary method of finding anything in SL, and we have several developing ad models more directly present in-world. I have seen networked billboards that let anyone pay to display on the network, while the landlord realizes a piece of the revenue. I have seen ad space sharing, similar to the banner link trading of the 2D web, and the often seen standalone, occasionally hideous storefront sign. My question to you is: Are targeted ads with a AdSense/AdWords effectiveness possible in a 3D environment such as Second Life?

Well, my answer is maybe. From a technical perspective one of the first problems is the concept of targeted. It is much harder to garner useful information from the current 3D environment of SL then it is for Google to keyword search the webpage you are browsing. You could use the type of store or establishment that the avatar is in if someone would qualify that information for you in a meaningful way. You could query the description of items that the avatar is wearing or carrying, if only scripters and builders would bother to fill those in all the time.

I think that the person that comes up with the right solution might just build their own empire one day.

1.09.2007

3D Internet

Second Life is a 3D version of the Internet. At least that is how I have come to describe it to those who ask. You start saying things such as “it’s like an online game, but it is not a game” and you have resigned yourself to an hour of blank stares from reasonably intelligent people. So I tell them it is what the Internet is going to be. I hope that I am right about Second Life being it, but weather or not SL survives intact the tremendous growth spurt that is starting, they have forever changed what is possible. There is no going back!

The 3D virtual world is upon us, and we should embrace it or be pushed aside. Now to be clear, I am not saying that the 2D web is going anywhere. Radio did not die when TV arrived, it simple maximized upon things that it did best. And in the same fashion, text and images and video are vital forms of 2D communication that will only be enhanced by their new 3D home, while the 2D framework will still play to its best abilities.

You might ask how am I sure were all going 3D, or say that you don’t think that you will ever make the jump. And first I would say, that’s what my grandmother said about the Internet for the past decade. But this year she did all of her Christmas shopping on Amazon. Then I would tell you that I know it is coming for two reasons. 1) The technology is finally here. Bandwidth, graphics processing, general computing power, massive parallel network competency, it is all here like a perfect storm. 2) 3D tickles the human brain in ways that 2D never will. A recent study in SL showed that people controlled their avatars, in reference to things such as standing distances and other interpersonal communication measures, in a similar fashion to real life. They acted unconsciously in some ways as if their avatar was actually their real body. Think on that one for a minute.

1.08.2007

Second Life goes Open Source

Well the big news of the day is that Second Life open sourced its client side viewer under the GNU GPL standard. Complete with a snazzy developers wiki and a lot of audaciousness (their word, not mine), the Lindens have made a giant leap forward in guaranteeing the success of the 3D internet. They have talked about this path many times, claiming that it has been an integral part of their dream from the beginning, but I would have loved to be at the board meeting when Phillip Rosedale explained to his investors that he was actually serious about it! Just to see the look on their faces. Really, how many VC sign up to make history rather then money? I might be wrong, and there is a lot to be said about them to this point, but WOW.

I of course, like any application developer paying any attention, am fanatically happy about the situation! We have just been given the keys to the kingdom, and we are ready. I think the analogy the Lindens made to the open release of Mosaic, web browser whose open source release by Netscape pulsed throughout the net, is totally accurate. All of the interactive applications that we at Metaverse Technology have been developing, in spite of the total lack of client side access, have now just been set free. Imagine the web with just HTML, without Flash and QuickTime plug-in, without Java support, and now AJAX. That is the Second Life of yesterday, and as for tomorrow, you will never believe the possibilities!