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The Corporate Push Into Virtual Worlds

Companies as varied as Toyota, Dell, Sears, and Adidas have all established bulkheads in the 3-D virtual world called "Second Life." Is this influx of brands an exciting precursor of
February 03, 2007

A penguin has been showing up at Cisco's public events lately. Attentive and civil, it never causes a disturbance, but sits quietly on a seat and listens courteously to the presentation on routers, or optical networking, or IOS software, or whatever the topic of the day happens to be. Although the only one of its species in the room -- everyone else is human, although some are rather eccentrically dressed -- no one gives it a second look.

The Devil Wears Prada is playing on the large-screen television, and boxes of video games that link to Circuit City's main Web site are neatly stacked on shelves, but no one is around to watch or buy.

Circuit City have all established bulkheads there. And depending on your point of view, you could consider this influx of brands the exciting precursor of how we'll be conducting business in coming decades -- or the ultimate exercise in corporate flat-footed dunderheadedness.

"What the useful application will be for business is the million dollar question," says Bob Moore, a member of the research staff at the Computing Science Laboratory at Xerox Palo Alto Research Center (PARC), who studies virtual worlds. "A lot of it is just plain hype. We see corporations are excited about it -- just as we were excited when we first discovered it -- but the jury is still out about the real business value."

"There's been a lot of breathless virtual-dog-bites-virtual-man coverage in the media," says Edward Castronova, a professor at Indiana University, and head of the school's Synthetic Worlds Initiative. "However, once we get past that kind of hype, then things could start getting really interesting."

Grand Plans, Negligible Results
If you've read the press releases of the companies that have entered Second Life, you'll have already heard the rather grandiose predictions how some of the biggest design, marketing and sales challenges in the real world are about to be solved by the virtual one.

Having trouble understanding what your customers really want in a pair of jeans? Let them design them personally! Ditto a car. Or a new kitchen. Want to increase brand awareness? Open a storefront where shoppers can virtually browse your products, "engage" with them, and become more loyal! Hope to convert browsing into real dollars? Enable a link that sends them to your Web site where they can hand over their credit cards!

IBM has established several sites in Second Life -- several in partnership with other companies -- but despite their beauty, they are eerily devoid of virtual life.

It sounds good. The problem is that none of this is happening. The virtual stores are empty. The design simulations are kludgy -- and represent the ultimate exercise in pointless boredom for users who want to indulge their ultimate fantasies, not decide between olive green and stainless steel for a new refrigerator.

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