CNet and IBM are in Second Life. IBM have a full time employee who is researching Second Life for its business applications and is promoting virtual worlds within IBM. CNet is the first major commercial media group to take a permanent slot. It has covered Second Life more closely than other outlets and this step shows that they understand its significance.

Add to these the heavyweights already involved; Toyota, Adidas, Amazon, Starwood Hotels, Yale, Harvard, Warner Bros, and you start to get the feeling that the cat is out of the bag.

Despite this, and despite that present rates of growth would see over 30 million people in Second Life by July 2008, you still see the eyes glazeth over when you talk to middle management about it.

Second Life is hard to explain to people, precisely because it is a new medium. Gwynyth Llewellyn has blogged about this in her usual incisive manner.

And SecondLife looks like a computer game. Historically, any animated content struggles to get taken seriously. Blame Disney, who targetted animation at children, the censors who prohibited animated adult content and the difficulties of lip sync in the medium.

Second Life might look like a computer game but this is not people being entertained by passive, illustrated characters. It is the use of animation to provide real people with a mask of anonymity and access to a fantasy world. Relationships form very quickly and are very powerful. Because of this and because it is a commercial shopfront, business needs to take Second Life very seriously.

The apparently frivolous interface makes marketing Second Life difficult for its owners, Linden Lab . The problem is this: show people footage of Second Life and they relate to it from what they know. “Oh, this looks like a video game. Or, “this looks like The Sims.” Or, “this looks like The Simpsons.” Our visual response is, I’ve already seen this stuff.

Nonetheless, apart from being in Second Life, video is the most effective medium for describing the environment.

So if you don’t know anything about Second Life but are curious, have a look at the NMC video which presents their vision for education in Second Life. It’s a damn fine piece of machinima with a killer voice-over but when you watch it, keep in mind that every animated character you see in it is a real person.

And if you are a business or institution wanting inside knowledge of the medium, contact me for a personal tour.

I’m reproducing here an extract from an Instant Messaging conversation I had in Second Life last night. This is to demonstrate how SL could be used as a virtual store and how companies could use the environment to improve internal communication to the benefit of customers.

In SL I was shopping with Kate; I’d asked her to show me around. We (her avatar and mine) were walking around a virtual shopping mall and we were using chat software (IM) to communicate. The only significant changes I’ve made to the actual text of our communication is to change names and to substitute the word “paintings” for what we were actually looking for (never you mind).

Me: i need to get some paintings.
Kate Jones: Ayate has Ovid set up his shop here again? [Kate has IM'd a friend for info]
Ayate Morowa: hmmm one sec. let me look
Kate Jones: i think his last name is Kane.
Kate Jones: ok
Kate Jones: he has paintings
Ayate Morowa: yes
Ayate Morowa: second floor
Kate Jones: ok upstairs?
Kate Jones: ty [ty=thank you]
Me: thanks Ayate
Kate Jones: would you like to go have a look?
Me: yes please
Ayate Morowa: over this way on the second floor. the direction I am facing.
Kate Jones: k follow me
Kate Jones: ty Ayate

To sum up, my character/avatar is walking around a store with Kate. She IM’s another person who has more knowledge about the subject. That person directs us to exactly the right spot. (If I’d had questions about the art she could have IM’d the artist). Kate then takes me to the exact place and I buy the goods. This all happens within a virtual world, where labour rates are minimal, where all the people are beautiful and I am getting personal service. I don’t need to leave home and I am in complete control of the transaction.

For high ticket items like cars, electronics, jewellery and clothing, people will use SL to buy on-line or select on-line then attend a shop front to complete the transaction. The difference between this and a web site is the level of involvement. In Second Life, you are there inside the transaction. And so is a salesperson.

When I told a tech friend of mine I am taking my consultancy business inside an on-line computer game and am paying thousands of dollars for the privilege, he laughed at me. I have recently become aware of a game called Second Life which I believe will turn out to be one of the most profound influences on business and society this century. How could I not be involved in that?

It’s not fair to describe it as a game, it’s a virtual world. A game is about winning. Whereas Second Life is a platform for social and commercial development.

It is different to online games such as World of Warcraft, in at least four ways.

Firstly, the SL currency, the Linden Dollar has a $US conversion rate, allowing residents to sell real world goods in the game. The company who control the game, Linden Labs, do not discourage this.

Secondly, residents of the world are able to use 3D rendering tools and the platform’s scripting language to fashion their own environment. The result is an incredible outpouring of creativity generated mainly by role-playing gamers and graphic artists. All of this acts as a backdrop to the social side of the world, which is its strength. In part, SL is the new MSN. Instead of chatting while looking at text you are chatting while shopping for virtual clothes together, or exploring gothic dungeons. It is a far more immersive and more compelling environment.

The ability to relate to other people while disguised as a 3D animated self (an avatar) lends a fascinating social dimension to the game. Everyone can be beautiful in SL. The girls look like Barbie dolls, the boys look like Mr Universe. But there is enormous diversity there and some people also assume non-human forms. It makes for an interesting overlay to a normal text conversation.

Thirdly, it is possible in SL to set your own laws for your own community. This is done for instance by the BDSM groups, in particular the Gorean slave worlds. Experiments in social structure are already beginning. I refer you to New World Notes for further reading on the subject. You may also wish to read my new Second Life blog, Inside This World. Mature Audience only. But don’t read it if you’re a prospective client. I’ll never get any business off you.

Fourthly, there is a political undercurrent in Second Life. In-world protests, marches and activism reference what is happening in the real world.

If you make it inside SL, my in-world name is biscuit carroll. You can IM me once inside and I’ll have the Free Beer office set up there shortly. Drop in for a pint.

Have been doing some work on a Web 2.0 seminar/event, omigod. Or more correctly, omigod, my internet strategy is SOOO irrelevant.

The seminar is about the very significant changes that have occurred on the internet over the past 12 or 18 months in the development of social software in particular. The phenomenon of MySpace, the flickr explosion, podcasting, continued growth in blogs and tags…

CEO’s who don’t stay close to this stuff need to re-think. Here’s why.

Although there are obvious victims, eg newspapers who are losing the classified advertising business to web databases, there are implications for almost every business. The youth market is taking over the internet and they will grow up owning the medium in the same way that old people currently own opera. The youth market is a counter-culture. They don’t like big, established brands. That’s why big companies like News Ltd and even Yahoo and eBay are buying small successful web businesses.

Youth have an expanding capacity to share information and they’re hungry for it. And when I say they’re looking for information I’m not talking about your product list and a corporate profile. Because the youth market IS a search engine and they are looking beyond your sales territory and beyond what you want to tell them. They are looking for informed, credible, third party assessments of your products and your competitors’. They are looking to see if the product can be bought cheaper overseas or interstate. They want to deal with a company they like the feel of. If you look like a big, respectable, conventional company you’re probably exactly the sort of company they’re looking to avoid.

Increasingly they are on the net, not watching your ads on TV. Recent research in the UK shows that on average, across all demographics, people now spend more time on the net than watching TV. The more internetworked kids are, the more their information comes from their peers. The more search-aggressive those kids are, the more “information currency” they can use with their peer group to build status.

Now you might be thinking, thank God I don’t rely on the youth market. Alas, their influence is spreading! Adults are already aware of their kids’ search skills and internet savvy. Kids earn kudos by telling their parents useful sites on the internet. The kids get to do the research if the adults don’t have time. And they don’t have time. You don’t have time, do you? So the spread of information from kids to parents will accelerate.

The shift that is happening is a social shift, it’s no longer about the technology. It’s about connecting with people, meeting people, networking in new ways. This social shift is what’s going to affect your business. The technology is irrelevant to the process and it’s not what we’ll be talking about at the seminar. We’ll be talking about how businesses can improve their relevance.

The nets (by which I mean the internet and mobile phone networks) are the platforms on which these opportunities are developing. CEO’s need to re-appraise these platforms so they can relevantise their offerings. It’s a new word. You’re allowed to do that now.

Terrific event. Two star performances: Michaella Krajicek and Hawkeye.

The Hopman Cup was the first ITF tennis tournament to allow players to invoke the Hawkeye system to adjudicate close line-calls. There was full on acclaim for the implementation of this technology which removed the acrimony common when linesmen made human errors. Hawkeye will spread to Grand Slam tournaments pretty quickly. I’m thinking Wimbledon will be the last to adopt it. Cricket administrators! Get with it! LBWs! The Snickometer!

I have one suggestion for the Hopman Cup. About mixed doubles: it’s great to see both sexes on court enjoying themselves but men serve harder and hit the ball harder than women. It can be an unbalanced contest. If the team receiving service changed sides after each point it would be possible for the girls always to serve to the girls and the boys to the boys. This would remove the main disparity; when men serve to women.

The Hopman Cup has the potential to be more popular on television than a Grand Slam event. Just needs a little fine-tuning.

OK, so you can buy an episode of Desperate Housewives for your new video iPod for US$1.99. And various free-to-air execs in Australia think that this is a great opportunity to “monetise content” by allowing time-shifted viewing. Are you sure? On a 2.5″ screen? How desperate would you have to be, housewife?

I think the video iPod is a small white elephant. The iPod is a portable device. Audio is portable. Works fine in the car and while walking around. But when you’re moving around you’re by definition concentrating on where you’re going. And when you’re sitting in a cafe with friends only one person can view the screen.

Should have been a clue: You’ve been able to buy small screen portable TV devices for years. How many people carry one of those around with them?

Where is the content for the video iPod? TV shows will struggle on that small screen. Movies are worse; imagine spending 2 hours; my eyes hurt just thinking about it. Exclusive content would help but if you had great content why would you sell it for $2.66 on iTunes? Great time-sensitive content (arrest of Osama Bin Laden) would be sold to the mainstream news media. Great uncensored content (high profile celebs having sex) would not work on a small screen. Music clips? Not a really big deal.

Content needs to be especially developed for the medium and it would need to be talking heads. Close-ups. Personal ads is one possibility but they don’t really need to be portable. For the life of me I can’t see the application.

Just because you can deliver a new technology doesn’t mean there will be a demand for it.

While the radio industry braces for the full effects of podcasting (reduced time spent listening, competitive content outside of the licensing system etc) they risk missing the newest threat: Pandora. You can try it for no cost until the end of September.

Pandora lets you build your own radio station on the net. You start with one song and Pandora finds and automatically programmes similar songs in that style. That might not sound feasible but the core of Pandora’s offering is a sophisticated database of songs classified according to style. The bottom line is: it works.

Pandora is the best of a new class of “recommendation technologies”. I’d just call it “auto-find”. The business model is subscription; US$38 a year gets you all the music you want. For older, busier users, the idea of hunting around P2P sites to find songs is too time-consuming. Pandora does it all for you in one-twentieth of the time it takes to find tracks, download to your PC, upload to an iPod.

So if you’ve got your computer hooked up to your stereo at home, Pandora is all you need. You get your favourite artists together with a selection of similar tracks, so you still get the surprise-factor inherent in broadcast radio. And for mobile use? Any web-enabled phone. Or, depending on bandwidth costs and battery performance you might be better off with a Wi-Fi MP3 player.

The subscription model is very ugly for the radio industry. Pandora collects the dough, pays the record companies the royalties; who misses out badly? Advertisers and commercial radio stations.

There are strategies they can adopt to protect themselves, but they’d better act fast. Pandora is a great product and word spreads quick these days.

Journalist Margo Kingston recently quit her job at the Sydney Morning Herald (a Fairfax company) and moved her blog to an independent website: webdiary.com.au.

On the 23rd of August a client of mine received 13 unsolicited emails from that website. The contents of the emails suggested that a lot of people who had commented on the old SMH’s webdiary site had received similar spam. One of my client’s proprietors had also commented on the site. Thinking the spam was from the Sydney Morning Herald and not liking the idea that my client’s privacy had been breached, I emailed them and asked them what was going on.

Their reply included the following: “It appears that your contact details were collected by Margo Kingston, who was previously engaged by Fairfax to edit the Web Diary. Those details were given by Ms Kingston to her associate, Hamish Alcorn, who sent the email in question. We understand that Mr Alcorn has destroyed the list.” It went on to say they had “taken immediate action to ensure that any personal information of Web Diary readers is properly protected.” So Fairfax did not knowingly provide email addresses to Ms Kingston. This was confirmed by Margo four days later when she posted this on webdiary.com.au:

“I understand that Fairfax has received a number of complaints from people who contributed to my former WebDiary on the Fairfax website. Those complaints relate to an email sent to those contributors directing them to my new Webdiary.

G’day. Fairfax’s security systems are intact. I did not and do not have access to or use Fairfax Digital personal information systems, nor have I ever wanted to. I make the statement above in accordance with the acceptance today of an offer I made to Fairfax last week to formally and completely put this fact on the record.”

In comments on the same page she continues, “we created a program to notify Webdiary’s change of address by email should that prove necessary, and an email was sent.” (Seems it did prove necessary). Interestingly, Margo also quotes legal advice she received …

” (a) you are not in breach of the Privacy Act because you are a “small business” (ie, one with an annual turnover for the previous financial year of $3million or less);

You are therefore entitled to consider that you had an existing business relationship with those contributors from which it is reasonable to infer that you had consent to contact them solely for the purpose of informing them that you would no longer be writing for the Fairfax Web Diary and in order to give them notice of your change of address.”

Some obvious questions:

If the emails were “directing them to my new Webdiary”, how can that be “solely for information purposes”? Surely that is for promotional purposes.

How can Margo say the emails were “sent on her behalf” but that she did “not have access to Fairfax information”? “Sent on my behalf” would seem to be contradicted by “we created a program”.

How can Fairfax’s security systems be said to be intact when many, perhaps all of the people who commented on a Fairfax web page have been sent unsolicited email by a third party?

If Margo’s legal advice is correct, many employees leaving a business would be entitled to email all their contacts and advise them of their new email address. Once they leave the big business they are a small business and therefore exempt from provisions of the Privacy Act. The Spam Act would not apply because they had an existing business relationship with the client.

And if that is true, the Privacy Policy you read on a website is not worth the pixels it’s printed on – your information is not protected if used by an employee who has left the company.

i’M a new iPod user and i love the way it works. The interface is simple and the implementation of podcasting is excellent but for the life of me i can’t understand why there has been no implementation of rss feeds (subscription) for iPhoto. Perhaps this is imminent?

Apple seem to think that people’s preoccupation will be looking at their own photos on their iPod. i don’t think so. What’s the big deal about that? i’Ve already seen my own photos. They were on my camera then on my computer; really i’M bored with them already.

This is exactly what happened with the development of the photo sharing juggernaut flickr incidentally. Eric Costello says he’d envisaged flickr as a tool for sharing photos with the family but it really took off when photographers started showing off their work more publicly. He points out that this allowed people to feel part of a community. Here’s the full interview. A digression: flickr have put together a “best of” selection of photos and it’s wonderful. it’s called interestingness.

Where the iPhoto has the potential to get REALLY interesting is allowing people to subscribe to other people’s photos. You can do this on the web of course when you subscribe to the web site of someone who publishes photos.

But when you view photos on the iPod you can still be listening to music so people will be matching music to their slide shows. it’s a nice way of listening to music. is the screen big enough for porn, one of my friends asked me when we were discussing this. i wouldn’t know.

The ABC’s step into podcasting is a screaming success. Radio National last week had over 100,000 downloads and are moving virtually all shows (sans copyright music) to the format. There is now heavy on-air promotion.

It’s a logical fit for RN. Lots of original talk content and most of it magazine-style; i.e. it’s not time-sensitive like news. The benefit of course is time-shifting. U can listen to the show when it suits U; not when it’s broadcast.

In the states NPR are not far behind. Of course, public broadcasters are one thing; there is no profitable business model yet developed. But I remember when they said about web search engines …