In a blog post, Linden Lab has issued a deadline of the 1^st October for the removal of networked ads from the mainland. This follows on from earlier discussion on the company's blog about their desire to 'clean up' what has become a somewhat chaotic region of Second Life. In early August they wrote: "Unfortunately with the wonderful freedoms and creativity the Mainland offers have also come substantial problems that are unique to this area of the grid and so the time for change is now." They define networked ads, or ad farms, as 'the practice of using many parcels over multiple regions, especially small micro parcels where the predominant purpose of the land is to hold advertising.'

Linden is caught in a tricky position over what to do with its mainland in Second Life. Land is far more scarce on this Linden-operated part of Second Life, meaning that there is a certain pressure to make the most of the space. To that end they are talking of introducing planning measures one would normally expect to find in real-world cities, including 'zoning' – one area might be residential, the next commercial, and each have different covenants to enforce that distinction. Yet on the other hand, Second Life prides itself on the creativity, both in terms of the arts and in terms of commercial ventures, which exists in the virtual world. In their programme to clean up the mainland, they must be risking destroying the very thing which makes the SL community uniquely attractive.

The impact for real-world businesses is certainly not detrimental here; there is little to no value in them buying display advertising in Second Life in terms of building their business (interactivity and virtual goods have been shown to be far more effective), so the restrictions will have little effect. However, a cleaned up mainland potentially brings big benefits by making it easier to do business on the mainland. Just like in the real world, a blue chip brand will wish to avoid being associated with irritating chaos, and will find a premises in a smart commercial district far more appealing than a tiny plot in a mixed use mess.

Acquisitions of new media companies by old media giants – Axel Springer AG has been around since the 1940s – are always exciting because of the vindication they are perceived to bring. The more traditional, 2D end of new media has seen a lot of this: MySpace by Murdoch, Last.fm by CBS to name just a couple of the big ones, with countless other far smaller acquisitions. However, the same has not been the case with virtual worlds and MMOs. Perhaps they are seen as being too close to gaming and too far away from content for old media to be interested, although we know in reality that the distinction is irrelevant, and in any case content is just as crucial in virtual worlds and MMOs as it is with MySpace. With acquisitions like this, however, the tide of perception can start to turn from geeky fad to serious business.

Of course, that’s not why Axel Springer bought Gamigo; they bought it because of their ‘digitization offensive’: Dr. Jens Müffelmann, Director of the Corporate Division Electronic Media of Axel Springer AG explains the reasons for the transaction: “Gamigo operates in a fast growing market segment, it will quadruple sales this year and it is profitable. Due to that online gaming is to become an important pillar within the digitization offensive of Axel Springer.” I suspect that changes in Gamigo will not be particularly dramatic, since Axel Springer has had long involvement, the company remains separate and the CEO still in place. There may, however, be efforts to do something clever with advertising, since it could potentially attractive to have a unified campaign across different forms of media with the same company.

They have launched the first 'social scene', a professionally designed public area, as opposed to the user designed private areas. This is a good step; anything which enhances the sense of community in the Vivaty virtual world will help keep users. It also begins to make it more obviously a single virtual world, rather than a series of loosely connected private spaces, and the sense of a world being a destination is important.

Facebook applications like Vivaty thrive on the newsfeed, which is why it is no surprise they are seeking to integrate with it more. For the few non-Facebookers, the newsfeed is a stream of reports on the activities of all of your friends, such as adding a photo, application or performing a task using an application. In other words, each time they publish in the newsfeed, they receive free advertising to potentially all of that user's friends. Specifically, it is the gift system which has been added. This is smart, because Facebook users as a whole are already used to the concept of virtual gifts (Facebook has its own microtransaction gift application), and so would be likely to click through.

Linden Lab have launched SLim, a thin client which enables voice and text communication with other Second Life users without needing to be inworld, or launch the Second Life viewer. The launch has been known about for some time: the first indications were in early August when it was discovered that Linden Lab had registered the SLim trademark. This was followed by an announcement of the coming launch two weeks ago.

This launch is probably most interesting when one considers its enterprise consequences. Users already understand IM and VoIP relatively well, and so less explanation of the concept of Second Life might be needed if the 3D aspect is viewed as an extension of that core functionality, rather than IM and VoIP being viewed as features of a 3D world. The difference is subtle but I believe that it is significant. CIOs are far more likely to chose to implement a system which offers robust IM and VoIP – standard technologies – with the added benefit of 3D environments, than they are to opt for an entirely new technology. It helps that the client is provided by Vivox in partnership with Linden, helping to bolster the enterprise credentials of the product.

With Second Life becoming integrated into more aspects of our Residents' daily lives, we saw a need to expand the world beyond its borders, enabling constant connection regardless of location," said Joe Miller, Vice President of Platform and Technology Development, Linden Lab. "In addition to all the enhanced communication benefits, SLim also helps solidify the value proposition of Second Life for enterprise use by providing a highly powerful VOIP and instant messaging client."

Browser-based virtual world developer RocketOn has announced a partnership with Animax to create parallel virtual worlds. RocketOn is a virtual world which operates through the browser on top of the existing web; you might walk your avatar on top of the Google homepage for example, or discuss a YouTube video with other avatars which happen to be on the same webpage. Animax is a full-service creative agency for virtual worlds. In the partnership, RocketOn will provide the technology and development, whilst Animax will provide the strategy and creatives for the project.

The appeal of the RocketOn virtual world concept for a brand is clear. For some websites, there will be a clear advantage in allowing users to create an avatar which then moves over that website. RocketOn has made it possible for a website to implement its technology without the need for a plugin download. An otherwise static web experience can therefore be made into a fast-paced social experience for relatively little cost, given that there is no need to develop a full 3D environment. "RocketOn is a great way to launch and manage parallel virtual worlds," says Michael Bellavia, CEO of Animax. "It enables us to create rich browser-based, virtual environments anywhere on the web without a user download. In a matter of weeks, we can literally build out a virtual space, deploy it on a website and populate it with content."

The RocketOn concept is not flawless, however. The avatars are scattered across the (very large) web, which may make it harder to build a critical mass on the service. There is also a danger of a 'build it and they will come' attitude. It has been consistently demonstrated that marketing campaigns in virtual worlds work best when there is a unique aspect to the campaign which goes beyond mere conversation. The most successful campaigns have involved far deeper and more exciting interaction than merely the ability to talk to other customers. That's not to say that the RocketOn platform can't support such innovation, just that it must be tempting for websites to simply add RocketOn to their website, given how easily it can be done, thinking they can now be certified 'Web 2.0 Compliant', without thinking through what they aim to achieve in business terms.

For a long time, virtual world There.com has been stuck firmly behind Second Life in the adult virtual world market. It has carved out a strong niche for itself as a virtual world ideal for marketing campaigns, but it does not enjoy anything like the number of users which frequent Second Life. They have launched a series of new features today which they will be hoping put them in a more competitive position.

A Facebook application, Facing There, will allow users to link their There account to their Facebook profile, showing information like upcoming events and groups. The convergence between Facebook and virtual worlds is a trend which is surely set to continue; by launching applications on Facebook, virtual world developers hope to generate viral growth and provide a way for users to gain more value out of a virtual world by making it relevant to non-member friends. Nevertheless, the There application is some way behind other virtual worlds applications on Facebook, the most notable example being Vivaty- designed to become a full 3D web presence.

They have also finally announced support for Mac OS X. Frankly, I was surprised to learn that they did not already support Macs, and it is a serious error that they have thus far failed to do so, despite launching in 2003. Adult virtual worlds have to be targeting early adopters hard at this stage in the adoption cycle, and many early adopters are to be found on the Mac. It is perhaps reasonable to launch a beta which only supports a single operating system, but to wait nearly 5 years before supporting a crucial operating system is surely madness. Nevertheless, they may now be in a better position to achieve more growth where it matters among early adopters.

The essay takes a look at the three main areas of real money trades: currency systems (like the Linden Dollar), microtransactions and virtual real estate. Whilst all three concepts are likely to be familiar to regular readers of this blog, Eisert and Boyd give a good background to how they work and their advantages and disadvantages. All three approaches are likely to become the subject of considerable academic investigation, I would imagine; the unprecedented economic structure which exists in-world operates on the same rules as the real world economy, yet in a much more controlled environment- macroeconomics on a micro scale.

There is also a brief overview of some of the US case law in what is a very new area for legal systems to be dealing with. Perhaps most interesting is the fact that it may no longer be possible for a VW to terminate a user's account for violation of the EULA, because of the virtual property they would stand to lose: 'These cases all suggest many other unresolved issues that may arise in the coming years. For example, acknowledging the value in virtual goods may actually increase the customer service burden on companies when it comes to termination. Traditionally, companies could merely terminate any user that violated its EULA. However, the Bragg case shows us that acknowledging the value of virtual property may create some additional obligations.'

Cross-world entertainment platform Myrl is set to launch its open beta today. Myrl isn't actually a virtual world; rather, it is a website which aims to act as something of a hub for users of multiple virtual worlds, with the ability to keep track of friends, send messages and discover new worlds. They argue cogently for its need: 'The extraordinary growth of the number of worlds available and the extreme diversification of the experiences that are now possible in the virtual space is changing the way we use virtual worlds, making our virtual experience more and more multi-world and content-driven, rather than world-driven. We want to support and foster this change, providing a platform that enables worlds-browsing and makes our virtual lives easier, richer and funnier.'

Myrl has been in closed alpha for some time, and is now launching into full open beta. Along with the launch come a series of new features. Most significant is that the system is now compatible with 19 virtual worlds, compared to the previous 2. It is now also possible to manage several avatars from the same dashboard, and to aggregate content from multiple sources to create something akin to a lifestream.

Myrl is particularly interesting because it presents a very different side to the task of integrating virtual worlds. When one thinks of interoperability, it is typically examples such as the Second Life to OpenSim teleport which spring to mind as key stages along the way towards a universal metaverse. Yet it may be that something like Myrl is needed, even if such transport systems eventually come about. If done right, it could provide some clarity and order to what could otherwise be chaotic. Interoperability is thought by almost everyone to be a Good Thing, yet it has certainly been noted that it brings with it considerable risks and challenges. Perhaps a tool which sits on a layer above the worlds themselves has the capacity to really make true, inter-world interoperability work.

'Serious games', used to train new recruits, are big news in many other areas – the military is a particularly notable, and perhaps obvious, example. The resources needed to hold a large scale, realistic, military exercise are vast. Virtual training offers a cheaper and easier way which still has room for complexity. One can also safely allow more inexperienced commanders to hone their skills than on a real-world exercise.

Another is the training of new workers on oil drilling platforms. Within the first few weeks, the chances of an accident are far higher than during any period thereafter. It therefore makes sense to try and do some training in a safe environment to prevent accidents during the training without simply postponing the point at which the danger begins.

Last week I reported that Second Life had broken a new record for concurrent users, breaking through its five month plateau to achieve new heights. Today, courtesy of Reuters, comes news that the Second Life economy is in good shape.

According to Reuters, over 61,000 avatars in SL earned more Linden dollars than they spent. Bear in mind that there are a total of 34.7 registered users in Second Life, and that does not sound too impressive. However, when one considers that the current record for Second Life concurrent usage is 67,335, it sounds far better. That 61,000 people are able to profit from Second Life is both a positive reflection upon the entrepreneurial spirit of the individuals involved and, perhaps more importantly, on the platform itself, which has enabled a creative economy to survive and flourish.

Second Life will live or die by its economy. It is one of very few virtual worlds to have a comparatively unregulated economy; one could even argue that it is ahead of its time in this respect. If it can achieve a healthy ecosystem in which users either extract money or enjoyment from the economy, then Second Life will remain healthy and continue to be able to collect premium user fees. The shadow hanging over the virtual world, though, is that premium user numbers are falling: 1,410 paid user accounts were shed in July – a far from ideal situation for a business derives the vast majority of its revenue from such accounts.

Second Life, and Linden Lab, are going through a period of fascinating transition as they decide what the best position for Second Life is within the market. Within the next year, I would suggest, we will have a much better idea of what sort of virtual world Second Life will become, and able to make far more accurate predictions as to its future success.

Lord of the Rings Online Executive Producer Jeffrey Steefel has gone on record stating that Lord of the Rings Online will be the first MMO to achieve mass market success since World of Warcraft. Whilst Steefel clearly has a vested interest in stoking up hype for Lord of the Rings Online, it is nevertheless interesting to analyse LOTRO's chances of unseating the powerful incumbent, WoW. In an interview with EuroGamer, Steefel said: 'There's another level of success, which is reaching a certain mass-market critical mass, which to be totally fair, only Blizzard has achieved completely so far. We think that we are the game that has the most likelihood of being the second to do that, but we're not there yet.'

Perhaps most interesting is Steefal's certainty that the subscription model of $14.95 a month is not here to stay. There is clear evidence that subscriptions are under threat. WoW is one of only a tiny handful of MMOs which have been able to make the model work. Firms are increasingly looking to create casual gaming products, which potentially could attract a much larger audience than conventional games at a fraction of the cost, making it possible for the game to be released for free.

So despite a business model which looks a little shaky at present, how will LOTRO expand? Mostly through reaching more global markets. LOTRO has the luxury which most MMOs do not have: sharing a brand with a wildly successful film. This gives global recognition, and means that if done right, LOTRO could be a popular MMO all over the world. At present, global expansion is probably wiser than trying to expand in the existing market, given that the existing market has probably already made its mind up as to which MMO to play. The big money in the future will be made from people not using virtual worlds or playing MMOs at the moment, but who start in 10 years time.

The report covers a range of these risks, and gives advice to developers building virtual worlds on how to make secure software. It also gives some interesting statistics on the shady world of malware. It reveals that a zero day exploit could reach $50,000-$120,000 on the black market. Perhaps even more alarmingly, it shows a dramatic increase in the number of password stealing trojans over the past eight years.

I was most interested, however, by the section of the report which dealt with the security risks of the future, as a result of trends in the industry. One which we have been covering extensively on this blog is that of convergence between the 3D web – virtual worlds – and the 2D, HTML etc web. Muttik, the report's author, argues that links to the web from virtual worlds (which are becoming increasingly common, and are already extensively used in many VWs), pose a new security risk as it becomes possible to persuade a user to click a link by its context in the virtual world, and then link to a malware site. A related, but different, trend is that of the integration between different virtual worlds. This is generally a good thing for the user, although it does bring its security risks. Linden Lab, for example, is working on the ability to teleport content, as well as an avatar, from Second Life to OpenSim. Muttik argues that if that content is active, then it creates the possibility of cross-world viruses, which can spread between virtual worlds. The same would be the case for virtual spam.

Despite the clear risks, Muttik is optimistic that we can get it right: 'It is possible to make most attacks in virtual life impossible or uneconomical. There are no good reasons why virtual characters should suffer from the same troubles—spam, phishing, adware, spyware, Trojans, viruses, worms, and other malware—that currently plague our real day-to-day lives.'

Enterprise virtual world platform ProtonMedia has announced a 'Go Green, Go Virtual' initiative and not-for-profit foundation to champion the environmental advantages of virtual worlds, and to provide support to 'worthy organizations dedicated to promoting environmental responsibility through energy conservation and alternative energy use'. A portion of ProtonMedia's profits from the sale of its ProtoSphere product will fund the foundation.

The environmental case for increased use of virtual worlds in enterprise is strong. Probably billions of miles are travelled every year in business travel, and aviation is known to be one of the main emitters of greenhouse gases. Videoconferencing and, of course, standard voice calls have long been an alternative to travel, yet businesspeople continue to seek face-to-face meetings. It may be that virtual worlds can go further than other meeting-replacement technologies have thus far; the spatial environment in which meetings occur may improve the experience further, making it feel more genuine. It may also increase efficiency, avoiding some of the irritating problems of conference calls, for example, such as working out who is speaking at any one point.

This is also a savvy marketing move from ProtonMedia. Companies are desperately trying to improve their green credentials, both for marketing and (in some cases) for reasons of conscience. Pitching a product along those lines, which also happens to promise the ability to cut down on transport costs, is therefore a wise move. There are so many enterprise virtual world platforms out there that standing out in the market can be hard, so if ProtonMedia can successfully position itself as the virtual world platform to help the environment, even if it has no material advantage on that front over any other such platform, it stands to gain.

A newsletter published today by Social Technologies, a global research and consulting firm, may help with that. Whilst little of its content will be new to those experienced in the industry, it is an excellent, and relatively short, way to get a non-expert executive up to speed. The articles in the newsletter include:

• Virtual worlds @ work. As more companies crack the code on how to effectively interact with consumers in virtual worlds, businesses are starting to use virtual worlds for their own internal activities--more than for marketing.
• Imports from World 0. Clothing, cars, and jewelry are just some of the items that have been, or have the potential to be, exported from virtual worlds to the real world.
• My Second Life. Learn why five professionals have flocked to virtual worlds, including Kelly Trent, associate marketing manager at Wiley Publishing, and Randal Moss, director of the American Cancer Society's Futuring and Innovation Center.
• How we got here. Learn about developments over the last 25 years that have helped pave the way for today's virtual worlds.
• Brave new world. An interview with author and blogger Wagner James Au.
• Making money in the metaverse. An interview with Daniel Terdiman, author of An Entrepreneur's Guide to Second Life.
• Do you speak World 0? The virtual world comes with its own language, so we've defined a few basic terms.

Apart from the bizarre need Social Technologies feels to coin a new term for virtual worlds – World 0 – the newsletter provides useful background information and cogent analysis of the space. It is available as a PDF. I should also add that another, even better, way to get up to speed with the very latest in virtual worlds, hearing from the best and brightest in the industry, is to come along to the conference on 6-8^th October. On the final day, there are a series of optional workshops designed to equip attendees with the knowledge they need to be successful in VWs.

Hitwise has some statistics on Kohls' recent promotion with Stardoll. Stardoll is an ideal choice for clothing brands wishing to market in virtual worlds, due to the strong emphasis placed on avatar apparel by Stardoll. The shape of the Kohl promotion was the same as many others: Kohl setup a virtual storefront through which it sold apparel to avatars, also linking to products in its real-world online store. This sort of campaign is a dream come true for marketers: users effectively paying to be advertised to.

Hitwise data show that Kohls.com was the number one shopping and classified site downstream from Stardoll.com; in other words, Kohls was the site related to shopping or classified ads which users were most likely to visit after Stardoll.com, indicating that Stardoll was sending Kohl a good deal of traffic. Further, in the week to the 16^th August, Stardoll was accounted for 0.26% of visits to Kohls- a relatively large number, only just behind Ask.com.

This kind of data makes the case for advertising in virtual worlds easier to make. Quantitative return on investment is sometimes tricky to see in virtual worlds campaigns – particularly those which aren't aiming to sell anything or drive traffic anywhere in the short term. Highly focussed and relevant campaigns, however, have been shown to work, and it is likely that these will increasingly become the norm, rather than the exception. It will also have an impact on the development of virtual worlds. Targeted and measurable campaigns will tend to favour virtual worlds with a clear premise, such as Stardoll, over more general services like Second Life.