Doing Business Virtually -- Have Your Avatar Call My Avatar

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What do Xerox printers, Fenway Park, green creatures and an executive zipping around with a personal jetpack have in common? Are you stumped? You might not be if you had an avatar.

For those who don't, here's the answer: Xerox Corp. workers, customers and analysts all came together for a meeting and product launch held simultaneously at Boston's legendary baseball park and at Xerox Inspiration Island in Second Life. Several virtual participants were, in fact, green, and Xerox Chief Technology Officer Sophie Vanderbroek made a spectacular crash-landing entrance via her virtual jetpack.

Jonas Karlsson, a researcher in the Xerox Innovation Group, says the virtual meeting provided an opportunity to showcase products as well as test the use of Second Life for a meeting. But Karlsson is being modest. In reality, the event has a larger meaning: It's helping to herald the next big thing in communications.

The real world and the virtual one -- in which people represented as avatars can interact with others as well as virtual representations of real and imaginary objects -- are beginning to blur in professional settings, as companies explore how virtual environments and technologies can bring value to their businesses.

Don't worry if you don't have an avatar yet. It's still early. But be warned: Many think it's just a matter of time before being "in-world" becomes as important for business as having a Web site and standard teleconferencing equipment is.

"Everybody's kind of all over the map of this, and for the most part, people have no clue what they're supposed to be doing. It's very much in the exploration phase," says Rob Enderle, principal analyst at San Jose-based Enderle Group. "But eventually someone will do it right -- and we're still waiting for that someone who does it right -- and then they'll all come flocking to it."

Businesses are already getting a sense of what the right approach might entail, mostly from entertainment companies, Enderle says. He points to The Walt Disney Co.'s virtual-world offerings, which include a fairy site and a Pirates of the Caribbean site, as ways to attract and retain customers.

"Those are ways to keep [kids] tied into the Disney experience so they'll consume goods and services," says Enderle. "They're one of the few companies that really thought through that, but even with them, I don't think we've hit the limit on really making use of the tools."

But, again, it's still early.

It was just two years ago that Second Life, the virtual world created by Linden Research Inc. and the clear leader in this arena, starting making headlines, says Stephen Prentice, an analyst at Gartner Inc. And even though SL is the best known of the virtual worlds, it's not really that big. It claims about 12 million residents, but Prentice says that number refers to the 12 million people who have downloaded the free software. The actual number of users who have been in-world in the past 30 days is closer to 850,000.

That's not a huge target audience, yet some companies were still eager to jump into Second Life and other popular virtual worlds during the past two years, Prentice says.

"When it started to take off in 2006, we saw a lot of companies creating virtual headquarters," he says. Some of the big-name automakers, banks and hotels replicated themselves in virtual worlds and then waited to see who would show up, using their virtual operations as a way to market, advertise and maybe make money.

Virtual Value

The car company Scion is a case in point. Scion has had a presence in the virtual world since April 2006 and is now established in four sites -- Gaia, Second Life, There.com and Whyville -- according to Adrian Si, interactive marketing manager at Scion, a division of Toyota Motor Corp. "It gives us great exposure," he says.

Not all companies are so upbeat. "What happened is they just didn't get people interested, so they've been going through a bit of a hiatus," Prentice says, noting that over the past year or so, a number of companies shut down their virtual operations or just let their in-world sites turn into ghost towns. But that's not as dire as it sounds. Prentice says it's less a permanent corporate pullout than a temporary pullback for assessments.

"They're refocusing on how to use the technology, possibly using one of the virtual worlds to work better internally," he explains. "So they're looking at using it for collaboration vs. e-commerce. They're setting up meeting rooms in private areas so they can control access. It's a little like teleconferencing."

Some companies find significant value in internal collaboration. Text 100 Corp., a global public relations firm with 31 offices around the world, made its virtual-world debut last August with a companywide meeting.

CEO Aedhmar Hynes, who is based in Manhattan, says she scheduled the meeting so she could update employees on company news and celebrate some business milestones.

But the real benefit wasn't the easy and cost-efficient dissemination of information -- although that was important -- but rather the camaraderie built by the event, she says. "It really made us feel like one company, because everyone had a shared experience. It created a bond," she says.

The event also motivated employees to experiment with ways to collaborate in Second Life, she says.

"Once people created avatars, they were more likely to get involved and do things in Second Life," Hynes says, noting that she has seen smaller meetings and training sessions take place in-world since that first event last year.

Hynes says she initially heard about the virtual world in 2005 and soon realized that it was a technology that could increase internal collaboration as well as collaboration with clients. She also saw the virtual environment as an important marketing opportunity.

Erica Driver, an analyst at Forrester Research Inc., says there are several areas where virtual-world technologies will be critical for companies. One is viewing, analyzing, presenting or interacting with complex data. Another is learning new skills or rehearsing material. (You can't stage a fire on a real oil platform, but you can run through it virtually, she says.) A third is transforming presentations into tours that take place in virtual worlds.

IBM is looking at the virtual world for all of that. Its employees have had meetings, events and training sessions in-world, both at its own internal site and in Second Life.

It's also looking to use the medium to sell its products and services to other companies. "It's just a very powerful way of meeting, interacting and doing work with other people," says IBM executive consultant Doug McDavid. He says that about 6,000 to 7,000 IBM employees have avatars.

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