What is Second Life?

by Erica Metzger

Editor's note:  just when hiring managers and HR professionals thought they might have heard it all, the first virtual job fair of its kind was held in Second Life during the month of May 2007.  Candidates, represented by avatars (an Internet users virtual self) from all over the world participated as they met “avatar” recruiters from Sodhexo, eBay, HP, Microsoft, T-Mobile, and Verizon. Since virtually (no pun intended) few clients I meet with and few audiences I speak to raise their hands when I ask, " Have you ever heard of Second Life," I requested Erica, our summer intern and a representative of the young educated adults entering our workforce, to explain what Second Life is.

Second life (www.secondlife.com) is a “3-D virtual world entirely built and owned by its residents.” Launched in 2002 by RealNetworks CTO Philip Rosedale in an attempt to create an online ‘Metaverse’, or a virtual reality-based internet, Second Life has increased from 5 initial members to 6,646,199 and growing.

If you are familiar with games such as The Sims (EA Games), then you are familiar with the basic structure and premise of Second Life.  Otherwise, Second Life is an online ‘world’ that is virtually animated to look and act like reality.  The major initial difference between the two simulations is that you micromanage a family through day to day, computer stimulated situations in the Sims. But in Second Life, the only person you control is an avatar (that you create) through daily interactions with other people from around the world in an online community.  Another major difference, and perhaps the biggest selling point of Second Life, is the economy.  You are able to exchange the Second Life currently for U.S. Dollars and Euros.

Second Life Dollars for American Money?

“The LindeX is a Linden Dollar exchange offering residents of Second Life the ability to either buy or sell Linden Dollars. Prices at this site are set by the market price or the best price offered by sellers of Linden Dollars.”  Currency exchange converter for users as of 3:00pm on 05/24/07 the exchange buying rate was $1.00 = L$186 (L$ = Linden Dollars) and the selling rate was L$285 = $1.00.

You can buy and exchange Linden dollars directly on the sight, although L$ are also commonly bought and sold on e-bay and personal websites.  In order to avoid fraud, Second Life imposes limits on the amount of money you can exchange per day in your account, dependant on what type of user you are. For example, regular residents are restricted to less than $250 worth of purchasing power within the first month, however Businesses with a level 4 (most advanced) are able to buy and sell Linden Dollars for $40,000 and $1,280,000, respectively. You are also charged $.30 for each purchase and Linden imposes a 3.5% fee for each selling transaction.  Similar to the US stock market, Linden reserves the right to call a trading halt for anywhere from 1 hour till noon the following day based on certain imbalances between buyers and sellers.2  This free market system creates numerous advantages for businesses looking to extend their company online.

What are the Business Advantages of Second Life?

First, retail or customer-based business can manage and observe trends among the purchasing and design of avatars.  This could easily be used as a projection for future demand.  Plus all the information they gather about the trends is relatively inexpensive compared to the pricy alternative of real-life testing the product on the market.

Some of the biggest developments in Second Life are classrooms and other learning environments.  Schools such as Harvard and University of Pennsylvania (Wharton) are already holding online discussions and panels of speakers, not to mention credit-worthy classes.  Wharton, for example, is holding Supernova, a conference where students will discuss developing technology, advise current businesses about technological development, and build their own virtual businesses to have a competition for who will be most successful.  

According to the Second Life Virtual Economy Key Metrics (through April 2007) the largest age demographic for Second Life is between the ages 25-34 with 38.51%.  The median age for the entire population is 30 years. This means that 65% of the purchasing population is less than 35 years old.

Marketing to this demographic could be incredible for prospective employers.  In Second Life, there is a population of over 6 million registered users and with an average monthly return of 1 million, there are approximately 65,000 consistent users younger than 35.  A Second Life study, conducted by the Dutch-owned, non-profit EPN-platform, found that out of a random sample of 246 users, close to 50% had university education. This makes the market potential of Second Life users to be highly desirable, considering that most people between the ages of 18-24 do not have job satisfaction or security, and that many people within the ages of 24-30 are prone to switching jobs several times. “The Tech Journal of Employment, which surveys employees in the tech sector, found that employees between the ages of 20 and 35 are the most prone to frequent job-hopping and being dissatisfied with their current jobs”.

Many businesses are already capitalizing on this demographic.  Companies such as IBM, Adidas, Scion, Viacom (MTV), Coca-Cola and American Apparel (just to name a few) are hiring employees to build Second Life islands, where the company can then have a virtual store, hold conferences with clients from all over the world, hold concerts/events, observe market trends among their stores and closest competition, and literally anything else they might find useful to the success of the company.  Starwood Hotel chain is building virtual hotels before they build the actual model to get a working blueprint of the construction, feedback on new ideas within the hotel, and to monitor the work-ethic of the staff. Companies even have complete copyright control of the products they make in Second Life.  That being said, it is very important that highly-desirable goods be copyrighted because otherwise they can be easily reproduced by anyone. 

There are several other examples of real-life businesses that also virtually exist.  Not only are they creating online satellites, they are also interviewing prospective employees within Second Life.  Businesses are even getting together and holding Second Life Job-Fairs.  On May 15-17, 2007, Microsoft, HP, eBay, Verizon, T-Mobile and Sodexho interviewed and recruited at TMP Worldwide's NiW (Networking in World) career fair.   Everyday, companies find new, creative ways of developing their business for this online sector because Second Life is a relatively free world, void of government interaction with a limitless supply of land and resources all available at the click of a button.

What’s the downside of Second Life?

There are a few potential negative aspects of Second Life.  The terms of service outline some rules that if enacted could be devastating for companies who rely heavily on financial transactions.  First, “Linden Lab has the right at any time for any reason or no reason to suspend or terminate your Account.”  Second, “Linden Lab has the absolute right to manage, regulate, control, modify and/or eliminate such currency as it sees fit in its sole discretion”. This means that at any given time Linden Labs could a) delete your account and b) eliminate the L$ currency.  Now, it is not foreseen that either of those options are going to happen; however, what companies need to realize before they move entirely online is that it could.  Moreover, there is no outlying monetary regulatory entity separate from Linden Labs.  This could cause potential problems with the economy depending solely upon the decisions of the creators.  Obviously, many companies believe that the positives of Second Life outweigh the negatives and continue investing their business within second life, regardless of the potential financial risk. 

How do I get started?

First you have to go to their website, www.secondlife.com and create an online account which is free for basic users and $9.95 a month for premium accounts, who receive a monthly stipend of Linden dollars.  Then you will need to verify your account via e-mail and download the client to your computer.  Once the game is loaded, you are prompted to an educational world within the game that teaches you how to control your avatar, change your features and understand how the games works.  From that point, if you are a casual just continue playing the game.  Businesses and private owners are then able to purchase islands (needed in order to build a private building) which are available for an initial fee followed by monthly rent.  The rest is up to the user and the boundaries are quite limitless.  It has been hypothesized that virtual games like Second Life is the future of business and could quite possibly be as big as the internet itself.

Linden Labs. “What is Second Life” Second Life – What is Second Life?. 2007. Linden Research, Inc.    <www.secondlife.com>.

Linden Labs. “LindeX Market Data” Second Life – What is Second Life?. 2007. Linden Research, Inc.   < http://secondlife.com/whatis/economy-market.php >.

Terdiman, Daniel. “Second Life Teaches Life Lessons.” Wired Apr. 2005.               <www.wired.com/gaming/gamingreviews/news/2005/04/67142>.

Linden Labs. “Second Life Virtual Economy Key Metrics (BETA) Through April 2007” Second Life        Economic Statistics. Apr. 2007.  Linden Research, Inc.

<http://s3.amazonaws.com/static-secondlife-com/economy/stats_200705.xls>

  Atterna, Dr. Jelle and Dr. David de Nood. “Second Life; The Second Life of Virtual Reality” Dec 2006: 20-  The Hague, EPN- Electronic Highway Platform. “Second Life, het Tweede Leven van Virtual      Reality”. <http://www.epn.net /interrealiteit/EPN-REPORT-The_Second_Life_of_VR.pdf>.
Williams, Sean. “Job satisfaction linked to age” Apr. 2004: Encounter: University of St. Francis Online.  2 Apr. 2004 <http://www.stfrancis.edu/encounteronline/           Archive/april_2_2004/featuresjobsatisfaction.html>.           

  Zimmer, Linda “TMP Worldwide Holds RL Career Fair in Second Life” May 2007. Business Communicators of Second Life. 10 May 2007.

<http://freshtakes.typepad.com/sl_communicators/>

Linden Labs. “Terms of Service” Second Life – What is Second Life?. 2007. Linden Research, Inc. <http://secure-web8.secondlife.com/corporate/tos.php>.

Erica Metzger will be a junior student at University of Pittsburgh and interning at Success Performance Solutions during the summer of 2007.

Read more about how companies are Recruiting Young Adults in Second Life, MySpace and Facebook.