In my work as creative director, I do a fair amount of projects in Second Life, so I know where the hype ends and ROI begins. It took only a few minutes to determine that Lively had a very limited shelf life. Their first crime was that Lively only worked on Windows platforms – this is a multiplatform world, keeping spiritual resonance with Redmond these days is the kiss of death. If some under-funded start-up was bringing us Lively, I could understand the Windows Only mentality, but this was a Google product. So the thousands of art directors in the ad agencies of America, who were slaving away on the next big campaign, were ignored by the Lively roll-out because most of them are on Macs.

To say that Second Life is a failure is to say the web was a failure in 1996. Remember back then when every company knew they needed a website but had no clue what to do with it? Just how many of those horrible 90s era websites have we blocked out? Oodles probably. But the web didn’t fail, the web sites failed because the developers didn’t know how to make the sites generate ROI.

Virtual worlds are in the same boat. Very few companies out there have a clue about how to generate ROI for their clients with virtual world campaigns. I recently met with a San Francisco Bay Area ad agency who had a client who wanted to invest in Second Life and the ad agency talked them out of it, mostly because they didn’t know how to generate ROI for that medium. Inexcusable. There are plenty of ways to get your clients product into Second Life and have it be a success. It is done everyday.

But there is another reason why Lively failed and it is a problem through out their product line. Google became number one without advertising. Not one ad campaign was ever developed or deployed for Google. Last week, ClickStream published the results of a study showing Google Docs having difficulty finding a foothold against Microsoft products. Well, duh. Guess who has an ad budget?

If no one knows about your product, it is impossible for them to buy it. The process of buying denotes a previous familiarity, even if it is just brand recognition, that is sometimes enough to make the sale. But if you choose to keep quiet about a product, there is not going to be a lot of urgency to buy.

So why did Lively fail? Plenty of reasons, none of which are related to virtual worlds or the marketability of virtual worlds.

And if you still think virtual worlds are never going to take off, check out this little product.

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Wherever people gather there is the chance for humanity to impart itself upon those gathered.

We should expect no less from Second Life.

In a garden pavilion on an island, I sat with an assortment of human beings – one clad as a teddy bear wearing a Santa hat, another as a brazen vixen, a blue man, a tuxedoed prom king – and poured out my heart from a place of loneliness and grief. Click click went the computer keys, like the staccato beat of my heart. Clack clack went their replies, their empathy and their own tales of triumph and woe. Via my avatar – the persona I’d created to engage here – I was participating in an “anxiety support group” in the free, virtual world of Second Life.

As I write those words, I can hear the scoffing. Pathetic! Escapist! Are you addicted to computer games? Do you have no friends? Second Life? That place is just about weird sex fantasies!

I saw my first instance of online group therapy in the form of an email list in the mid-90s. Second Life is no different really, it is just a more immersive experience than email. And that immersion could be the key to better connections and a more expressive group therapy experience. Gone are the vulnerabilities of speaking to strangers in person. Expressing issues is more important I believe than rubbing elbows at the local church.

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CNBC ran a story on Second Life and how SL is creating a new economy much in the way eBay has. One woman profiled is on track to make over $80,000 in US dollars this year from the sales of her clothing line in Second Life. Her initial investment was a tad over $500.

The video is worth watching.

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Looking back, the same problems AOL had in the late 90’s, Linden Labs is now having with Second Life. AOL, though a string of blunders, stumbled and lost their edge. Users graduated from AOL to the unwalled frontier of the World Wide Web. Instead of starting up their AOL app, they launched browsers, email clients and instant messenger software – all from competitive vendors.

The landscape is different for Second Life. AOL had competitors. Thousands of ISPs launched in the 90s, all giving users a more robust world than AOL could manage to produce. Second Life has no such competitor. Yes, there are other minor players in the metaverse sector, but none matches Second Life in terms of growth (despite the tech problems) or user experience.

The thing that will secure Second Life in the future is open sourcing their grid software and allowing independent hosts to connect with the SL grid. There are, of course, a host of issues even with that. The SL currency called Lindens being probably the biggest problem related to open source expansion. Until then, watch new accounts to continue to be created and concurrency to continue to grow.

Hand-cream sales will also be on the rise.

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