In this photo provided by Linden Lab, Zee Linden (the avatar used by John Zdanowski, chief financial officer of Linden Lab) is pictured in a screenshot from Second Life. (Linden Research Inc.)

Can a virtual business reap real profits? The popular "metaverse" Second Life is providing some real-life ventures with an opportunity to discover whether they can find real business in a virtual world.

A screenshot provided by Linden Lab shows a scene of the "Second Life" virtual world. (Linden Research Inc.)

Second Life is one of the most popular online metaverses (a fancy term for virtual worlds). Visitors to the site create avatars — virtual "people" — to represent themselves and their computer screen becomes a window to a virtual world.

Think of it like a cross between a video game and a virtual reality simulation of the real world. Through their avatars, people can journey through online environments that resemble fictitious lands as well as actual places, with roads, buildings, islands and so forth.

But Second Life isn't only an interesting place to visit — it offers potentially interesting business opportunities as well.

The creators of Second Life, Linden Labs, let people buy land, create buildings and do business using Linden Dollars (about $4 US buys 1,000 LD).

Despite the fact that the rules for making real profits in this virtual world aren't yet clear, several Canadian business and education organizations are taking a trial-and-error approach, certain that their efforts will eventually produce rewards.

During the summer of 2007, for example, Université Laval students Boris Ung and Eric Laflamme built a virtual campus for the Quebec-based school's communications faculty that people can tour. Visitors to Laval's Second Life campus are welcomed by a female avatar who provides information about the school.

"The faculty director chose a female avatar since there are more women than men in the faculty," Ung said.

Long-term plans for the virtual campus aren't firm, but it has already generated buzz.

"This project stimulates discussion about the effects of emerging technology on publicity, journalism and public relations," said Ung.

Second Life isn't used only for promotional purposes. Dr. Sam Shaw, president and CEO of the Northern Alberta Institute of Technology (NAIT), uses Second Life to mitigate the costs of things like meetings. Since he teaches regularly and travels often, Shaw teleteaches to keep his classes up to speed. Large videoconference bills were the price NAIT paid until Shaw discovered the possibilities of an online environment.

In this screenshot from Second Life, an avatar is about to enter The Blarney Stone pub with a tour guide. (AP)

Today, when Shaw is on the road, he and his students congregate in one of NAIT's Second Life virtual auditoriums. There, Shaw uploads assignments, delivers lectures and otherwise keeps classes on course.

NAIT communications specialist Diane Begin-Croft recruits students in a welcome area, a concept similar to Laval's Second Life campus. "Potential students can take virtual tours of the campus," she said.

Although it has already accomplished some specific, practical goals for the institute, Shaw said NAIT's Second Life presence is still more about experimentation. "SL has given us tools and users are driving the evolution of this environment," said Shaw. "It gives us the ability to push boundaries."

Making real money

Although Second Life boasts some entrepreneurial success stories, with groups making money directly from Second Life-based ventures, they're still comparatively rare. More common are efforts like those of Vancouver law practice Davis LLP.

Davis LLP launched an online office earlier this year and intends to learn about Second Life's possibilities through trial and error. The firm built a boardroom for meetings with faraway clients and can use the virtual office as an online venue for recruiting lawyers.

The company's virtual office also helps it build a rapport with certain types of clients, according to technology and video-game lawyer Chris Bennett. Davis LLP needs an Second Life presence to maintain credibility with its video-game business clientele, Bennett said.

Sarah Dale-Harris, an intellectual property lawyer in Davis LLP's Toronto group, uses what she refers to simply as "the office" to build real-world relationships. "I've managed to have sit-down chats with a colleague in Montreal. We don't regularly chat in real life," she said.

Avoiding pitfalls

Creating a good virtual presence sometimes takes specialized help to get the right look and feel, though. To develop the office, Davis LLP contracted Second Life enthusiast Stacey Mitchell of Victoria, B.C., who spent about 12 hours building it from photographs Davis gave her.

A screenshot taken as an avatar moves down a street in a virtual representation of Dublin. (AP)

When not building and selling properties online, Mitchell uses her avatar, Halley Dean, to sell her own real-life photos and other creations in HL Designs, her Second Life store. As a Second Life business owner, she has seen what works and what doesn't.

"The biggest error people make is approaching SL without good planning," she said. "It's like embarking on any other type of project.

"For most businesses, SL is a marketing and public relations stream — a cost centre. That's the way most businesses should approach it, at least until they have a really good business idea."

Having an experienced guide never hurts. Second Life experts help newcomers avoid certain pitfalls — such as online sex dungeons.

"For example, I made sure that the place I rented for Davis didn't have a BDSM dungeon next door," Mitchell said.

But even the best experts can't eliminate all the problems that plague Second Life. Dungeons, griefer attacks (a term for virtual sabotage) and the seedier side of Second Life make headlines more often than its proponents would like.

"Some people who don't understand SL question the seriousness of it," Bennett said.

In addition, the initial buzz of an Second Life venture won't carry it for long. The Second Life world is constantly growing and evolving, and the number of residents online at any time is miniscule compared to the size of the virtual environment, which can make many areas seem deserted.

"New users can find wandering in an empty virtual world quite boring," said Ung.

Due diligence

As with any new venture, due diligence is a must online. Davis's IT staff is performing a security audit to make sure Second Life can be safely installed on associates' computers, for example.

"Because it's a new forum for us, we want to make sure our records and databases are safe," Bennett said.

NAIT's Shaw also noted that while the technology is adequate for NAIT's purposes, the institute can't assume everybody has adequate computing power or the broadband connection necessary to render the graphics-rich environment at home.

Throw in the program's historical bugginess and the steep learning curve non-gamers face, and a profitable stream of Second Life traffic can be difficult to attract. Ung opined that once Second Life becomes simple to use, perhaps via a web browser instead of a separate piece of software, it will take off, but for now, it's a virtual world in which companies are getting their feet virtually wet.

With its current small potential market, uncertain business environment and, for many, unfamiliar online territory, the world of Second Life has similarities to the internet of the early 1990s — leaving some firms questioning whether an investment in a virtual world will pay dividends the way the web has for many companies.

Entry costs, at least, are not a barrier to these early business experiments. Mitchell bought a quarter sim (a plot of Second Life property) for $250 and pays $85 per month for the server capacity on which her property exists. Laval's campus costs $225 plus $25 per month.

The Davis office wasn't expensive either. "It's more time than money," said Dale-Harris.

"Many multinationals have invested lots of time and money and attracted few clients," said Laval's Ung. "We approached our project as an experiment that shouldn't cost us a lot."

"You can't just look at costs and benefits," adds Bennett. "You have to go into it with a broader view and ask, 'What can this do for us?'"