POSSIBLE FUTURES OF VIRTUAL WORLDS AND SOCIETY

FEBRUARY 11, 2008

ROBERT BLOOMFIELD: Welcome, everyone, to the last panel of the conference here at

Emory University, the Virtual Worlds and New Realities in Commerce, Politics and Society.

We’ve got a mixed reality event here where we have three worlds involved here in Atlanta,

which is pretty much the real world. I am a Northerner, so there’s a little bias there. We also

have Second Life and Kaneva. And the magicians at Second Life Cable Network will be

doing their work to stream all these things together, so we’ve been talking about Virtual

Worlds for a couple days now, many of us. And so what’s the expression? “Show me, and I

understand. Engage me, and I understand.” So we’re really being part of a pretty

mind-bending experience here.

We’ve got a lot of people to thank. I want to start with Emory’s Goizueta School of Business

and, in particular, one of our panelists here, Benn Konsynski--Regin Tenjin, in-world--who

put this entire two-day conference together. I also want to thank the [Hallah?] Institute that

provided funding, and also the Federal Reserve Bank of Atlanta, that also sponsored the

conference. Those are the Real World sponsors for this Real World conference. This is also

a Metanomics event so for those of you in the live audience you may not know about this:

Metanomics is a weekly TV show in Second Life. We have our own sponsors. We’ve got

Intel, Cisco systems, Sun Microsystems, SAP, Kelly and, across the water, Saxo Bank in

Denmark and Generali Group in Italy. And a really special, special thanks to Second Life

Cable Network that does such amazing things.

We did something similar to this in September. We had Sandra Kearney from IBM--and that

was at Cornell--Second Life and the IBM builds in Active Worlds. And when we saw what

we’re seeing now, and what we will be seeing, which is people in worlds watching people in

other worlds watching them watch themselves and other people in other worlds, we realized

that, during our sound checks and all, we needed two extra technicians and a philosopher.

So we’ll see what we can do today.

We’ve got, in addition to Benn on the panel, we are blessed to have a couple great guests.

One right here in Atlanta is Chris Klaus, CEO and founder of Kaneva, the social Virtual

World. We also have John Zdanowski (“Zee Linden”) representing Linden Lab as its CFO,

and also he is in Second Life as well.

Now, this is an event that is spread across Second Life. By the way, I should mention we’re

seeing a bit of a delay. The sound is not exactly with the video. You get used to it. So now

we’re doing this in Muse Isle, which is a music entertainment island that also the people

there, JenzZa Misfit, works with a company that is creating animations so you can shake

hands and hug people and other appropriate activities and business appropriate activities as

well. This is being streamed into a number of other islands in Second Life, and one is run by

New Media Consortium, another by Second Life Library 2.0, Etopia, Colonia Nova,

ComMeta, Rockliffe University, the Terrace and the Business Exchange. So there are a lot

of people in on this.

Okay. So that’s, I guess, just a little bit more bookkeeping. We do have a group called the

Metanomics Group. You can join it if you’re in-world and see the backchat. Those of you

here in Atlanta, if you just look at the bottom of the screen you will see that there is a bunch

of typing there. These are people across all of these regions of Second Life who are

communicating with one another and responding to what they hear.

So that said, let me just give you a sense of this session. This is a session about the future

of Virtual Worlds. And we can’t really talk about the future without knowing where we are

now. So what I’d like to do is--we have representatives of the very important Virtual Worlds.

We’re going to ask them, really, where they are now, where they see these worlds going,

and then we can look ahead and say, “Well, what other new worlds might we expect to

come out, and what might they be doing?”

And finally we’ll get really speculative and also bring them into the conversation. And the

question there is, we’ve talked a little about the definition of what is a Virtual World, and that

definition is going to get tougher and tougher. We’re going to be blurring the boundaries

between different types of online technologies and between the Real World and the Virtual

World. And we saw some of that when we had Dave Altig, from the Federal Reserve Bank

earlier, talking about banking regulation, what is virtual, what is real? So that’s sort of where

we’ll be heading in this discussion.

I’d like to start now with Zee Linden. Zee, welcome to Metanomics.

ZEE LINDEN: Hi. Thank you for having me.

ROBERT BLOOMFIELD: Okay. We’re delighted that you can join us. Let’s see. I do want to

say we’re still just seeing an RL feed in Second Life. We’re not seeing the feed of Second

Life. I don’t know if that’s what’s intended. If it is, maybe you can message Curric Vitae and

let us know what’s going on.

Okay. Zee, when we talk about different types of worlds--and there’s so many out there--we

could talk about Linden Lab’s Second Life as a social world, but it really has a very, very

heavy dose of entrepreneurship because you have sort of handed over the keys to creation

to your residents. And so I’m wondering if you could just talk a little bit about why you chose

this business plan that you did and how successful you think it’s been.

ZEE LINDEN: All right. Thank you. So you’re really highlighting sort of one of the key

differentiators for Second Life in that there’s a sizable virtual economy that’s really built up

around all the individual creations and the intellectual property of all the users.

And just to put some numbers around that, last month there were about 55,000--I’ll call them

“profitable,” (in quotes)--in-world businesses or unique accounts that had positive monthly

Linden flow, and I think that those 50,000 accounts are creating a significant amount of the

content in Second Life, certainly not the majority of it. And those 50,000 profitable accounts

then turn around and make up a significant portion of the sales of Linden dollars on the

LindeX, the virtual currency exchange. And last month, about 8.2 million Linden dollars were

bought and sold by residents.

And I think what certainly Philip Rosedale, our founder, had the vision of creating was a

Virtual World where anything could be created, sort of where anything could be imagined

today could be created. And I think what we’ve shown is that there is significant demand for

that kind of creative inflexibility.

At the same time, you know, that comes at a cost. I think for us that cost is Second Life’s a

lot more complex than, say, another much larger Virtual World like World of Warcraft, where

there’s less user-generated content, certainly not none, but it’s really limited by sort of the

producers themselves. I think those two extremes something like World of Warcraft might be

ten or a hundred [orders?] of magnitude bigger, those Virtual World types of games,

[orders?] of magnitude bigger than a complex Virtual World such as Second Life. I think that

for a Virtual World such as Second Life you need to be aware there’s quite a bit more user-

generated content, we’re still--this is such the early stages of what people can do with that. I

think this type of event demonstrates, hopefully, a more integrated future between Real

World events where people can’t travel to them and Virtual World events. So that sort needs

more background, but if you want to [drill down let me know?].

ROBERT BLOOMFIELD: Yes, I do have some questions. And I’m looking at the backchat

and there are people in Second Life who are wondering how they can ask questions. You

can just send instant messages to me, Beyers Sellers. Actually, since I’m otherwise

occupied the backchat will be primarily and the IMs will be primarily monitored by

Steve Atlas who’s helping me out with this. But go ahead and feel free to ask questions that

way.

My question right now for you, Zee, is that you talked about some of the costs that come

with having such an entrepreneurial world. And one that we’ve been talking about quite a bit

today has been the issue of regulation. And we’ve talked a fair bit about banking. You

stepped in and you banned banking. You have a lot of people doing a lot of things that may

not be good for your business, may not be good for your residents. So can you talk a little bit

about your perspectives on some of the regulatory side, the institutions?

ZEE LINDEN: Absolutely. I think it gets to a complexity of any company that relies heavily

on user-generated content. I think many of these issues--sorry. I’ll get closer to the mike

here so, hopefully, I’ll [CROSSTALK] modulating.

ROBERT BLOOMFIELD: Yeah, actually, I think maybe a touch. So that little bit of wind

there.

ZEE LINDEN: All right. So there’s plenty of sort of regular Internet examples where there’s

constant user-generated content. And for the most part what people have figured out is that

the users themselves are largely responsible for their activities in that way. In some limited

cases, Linden Labs has had to step in and starting with the ban of gambling or games of

chance. And primarily we had to do that because the laws around processing credit card

transactions would have jeopardized the majority of the business because all our servers

happen to be hosted in the United States at this time, and I think that was probably the

bigger event. I think banking got some interesting views simply because of the broader

things going on the Real World around the banking sector. But primarily banking in Second

Life really wasn’t banking. What it was, was basically scams providing a horrible user

experience, _____ [involving?] high interest rates that were unsustainable, for the most part.

Certainly there were probably some legitimate organizations that may have been swept up

in that, but those organizations are certainly welcome to seek a banking license in the Real

World and then come back in to Second Life and offer that service, if it’s in demand. And I

think shutting down banking as we did in January basically saw almost no impact on the

overall economy. I think it was kind of probably much over-hyped and over-pressed for the

actual impact that it had on the Second Life economy.

But regulatory challenges or maybe stripping it away from actual governments and saying

more of the rules and social norms inside Virtual Worlds, I think that is sort of a key

challenge where there’s lots of people with lots of flexibilities and lots of freedom. And I think

one of the things that we think about a lot at Linden Lab is trying not to over-regulate,

over-rule, such that we could get to a situation because we have such a global resident

base where 65 percent is outside the United States, where we could be quote/unquote

“regulated” by the Real World to the point of the lowest common denominator. And I think

we’re really working hard to try and stay away from that and implement the tools that

different countries might want and different community groups might want to regulate and to

participate in various kinds of activities.

And I think those are tools that, again, are at the very early stages of development and that,

I think, over time, we’ll get to use and enable the residents themselves, basically, _____

Virtual Worlds to kind of govern themselves and implement the kind of norms they want

_____.

ROBERT BLOOMFIELD: Now, Zee, another cost of allowing this entrepreneurial society

among the residents is that sometimes it interferes with another thing that so many people

have been focusing on in Virtual Worlds, which is real-life enterprises coming in. So we’re

talking about for-profit companies that are trying to extend their brand. We’re talking about

federal agencies that are trying to use this as a form of enterprise--software,

telecommunications, virtual distance management. And it’s great to give them all these

powers, but then they lose a lot--especially for the companies that care about their

brands--they lose a lot of control. They may not be in the environment they would like to be

in. So how do you see the balance between giving people who want to control their brands,

the control they need, while also letting other people do as they see fit?

ZEE LINDEN: [NO RESPONSE]

ROBERT BLOOMFIELD: Did we lose Zee?

ZEE LINDEN: Sorry. I started talking while I’m on mute.

ROBERT BLOOMFIELD: Oh, I’ve done that before.

ZEE LINDEN: I really enjoyed my--I kind of answered already.

ROBERT BLOOMFIELD: We missed the good joke though.

ZEE LINDEN: I think you particularly referenced real-world companies coming in with brand

messaging. And I think for a large part many of those didn’t achieve the kind of success that

those companies were sold potentially or were hoping for or were expecting. Some certainly

did. And I think this is all part of the experimentation phase for Virtual Worlds.

There was a time when somebody was putting out a press release indicating that you set up

a presence in Second Life would generate [impressive views?]. And I think they’d kind of

probably follow us for other virtual worlds as well. It reminds me of the time in the earliest

days of the Internet when the real-world companies would announce that they’d set up Web

sites, and those Web sites were little more than brochures that they had put online. And

they certainly didn’t attract an audience for a recurring set of traffic that would yield success

for the real-world brand. And I think the same thing is sort of happening here. I think the

setting out basic sort of brochure where a kind of presence is in Virtual Worlds, that story’s

been played, and I think people have gotten smarter about it. And I think it’s things like

literally what Metanomics does with a weekly television show where they get people

together inside Second Life and have conversations that real-world brands could learn a lot

from as they enter the world of--

ROBERT BLOOMFIELD: Thank you for the plug. I appreciate that.

ZEE LINDEN: I think that this is all part of the experimentation. And one of the stories that

Philip likes to tell is, in the earliest days of television, in the earliest days of any new media,

it’s basically entertainment that drives its success. In the earliest days of television, it turns

out that professional wrestling was basically one of the most popular things on television. I

think in the same way there’s some sublime things going on in Virtual Worlds and Second

Life and then probably also some ridiculous things as well as people experiment to find what

works.

ROBERT BLOOMFIELD: Okay. Thanks a lot, Zee. We also have Chris Klaus here

representing Kaneva, and you guys have a somewhat different balance that you’ve chosen.

It seems to be primarily a social world, with maybe a touch of entrepreneurship. So can you

talk about your vision, really, for how to balance those?

CHRIS KLAUS: Sure. I think Zee was hitting on kind of--what we’ve strived to do is we’re

building an entertainment world and, in terms of realizing, I think, to get people to really

adopt this technology and adopt where we think these technologies are going.

Entertainment’s the great hook to say, “Hey, come in and check this out. Have fun.” And

then, as people are exploring these worlds, I think we’re going to see it morph into a lot of

other goals. I think this conference has been great, in terms of having the discussion way

beyond just entertainment. But then Kaneva--Kaneva is Latin for canvas--we really wanted

to open up a canvas for the community to paint on. And so within that we wanted not a

completely open world, in terms of so broad that you can do anything; we did set some

boundaries or some guardrails in place for the World.

Some of the key things that we’re doing that’s a little different than Second Life--or anybody

else for that matter, as we’re focusing on entertainment--we went out and said, “Look. Let’s

build an entertainment world. But what’s fun?” And what’s usually fun is around your friends

and having a good time. So one of the key things is we integrated social networking into the

World. So if you’re familiar with MySpace or Facebook or even linked in, it’s about

connecting with people you know. And so we’ve tried to integrate that capability into the

World so that not only is it you in the World, but it’s your friends, and you can quickly

communicate when did they come on, where are they, what are they doing? And then, as

you’re finding new people, you can quickly look at their profiles and find out who are they,

what are their interests, and see how relevant you might have stuff in common, what

interests you have in common. So we really focused on social.

We’ve also put guardrails in place to try and make it a modern-day world. For the most part,

if you look around our World, we’ve enforced kind of everybody has to be human. There’s

nobody running around, as you mentioned the World of Warcraft, and you can be an orc or

elf. In our World everybody’s human, male or female. We try to map it to what their social

networking profile says. So if they say they’re male, their avatar’s going to be male. If they’re

putting pictures of themselves and they say they’re female, they’re going to be female. So

one of the things we’ve done is, in our World we have a very modern-day setting. That you

have a mall. You have a cityscape. We’ve partnered with companies around entertainment.

One of the founding entertainment companies that’s helping us reach out for entertainment

is Time Warner, or Turner here in Atlanta, and we’re bringing in real brands, real

entertainment, with TBS and TNT and other shows that are very popular into the World so

our audience or our community can socialize and then ultimately connect with other people

in the World. So we’re excited about that.

And within that we find there’s a lot of dance clubs, there’s a lot of night clubs, and probably

somewhere up there there’s some people standing around. Usually it’s at night when we

see our peak hours that people come in. And we’re starting to see micro businesses

emerging where the community itself is paying for DJs to play real music and hire dancers

and recruit other people in the Real Life into the social sim club environment.

So at a high level we’re probably not full “do anything/

everything,” but we’re trying to keep some constraints that it’s a safe environment. We do

restrict certain content--if it’s pornography, or if it’s copyrighted material, unless it’s been

authorized like Turner’s, we’ll police it and remove it, so to the extent our community does

that. And within that, we’re mostly focused on entertainment today, but I think long-term

we’re seeing technology is going to evolve and we’re starting to see a lot of companies

asking, “Where can we take this?” And I think the answer for Virtual Worlds is, it’s pretty

infinitely applied to all kinds of businesses in other sectors.

ROBERT BLOOMFIELD: So a natural segue into the next topic, which is where you see

these things going--and let me ask you--I know you’ve been partnering pretty closely with

Turner, another Atlanta-based company, Turner Broadcasting System. Can you talk about

not just where you are now, but where you see that sort of partnership going for you? Not

necessarily with them, but it’s a nice concrete example that maybe you can let us know

about.

CHRIS KLAUS: Sure. Ultimately, as people are spending more time in Virtual worlds, I think

it’s a chance to bridge between what people have been doing with TV sets and watching

programming and start merging it together with a Virtual World. In fact, I think [Blake

Sayer?] who’s headed up the project from Turner--we sat down and started brainstorming,

“What could we do?” And one of the interesting ideas was not just broadcast the TV shows

into the Virtual World, but we’ve really sat down--and Turner created the sets of these

shows so that you can actually go on the set of Family Guy--and we’ll do the sets of all the

other shows that they’re licensing or broadcasting, and what’s exciting is ultimately our

community can engage, not just with the sets and watching the TV show--and it is a social

connection where your friends from all over the place, or if you’re a fan of a show, you can

find other fans and discuss it. But ultimately I think it’s about engagement.

Long term, I think these shows are going to intertwine with TV content so that it’s not going

to be just watching a TV show. For example, a couple weeks ago we had the cast of a very

popular show called Ten Items or Less. It’s like Office--if you’ve seen Office. But kind of

around a grocery store. We had the cast in the World taking questions just like we’re doing

here, and our community loved it. They loved engaging and seeing that they were being

recognized as they were asking questions. And it’s about that one-to-one engagement with

the community, and ultimately I think more and more we’re going to see some of the stories

that happen on TV will get intertwined with Virtual Worlds and vice versa.

ROBERT BLOOMFIELD: So speaking of one-on-one engagement with residents, we have

some questions, I know, coming in from the backchat in Second Life. Steve, you want to

give us a couple?

STEVE ATLAS: Yes, we’re starting to accumulate a few questions. Is this mic working

okay?

ROBERT BLOOMFIELD: We’re never going to know.

STEVE ATLAS: We’re never going to know. We’ll know in a few seconds. So the first

question relates very much to what you were just saying, John, and that’s about the status

of your world as an entertainment medium. The question is coming from Lyric Wilberg.

“What do people in this space do when they’re tired of being entertained?”

CHRIS KLAUS: What do they do? I think ultimately one of the areas that we’re focusing on

is, ultimately, what people are asking for in Kaneva is just a higher level of engagement. I

think we’re at the beginning stages of answering that question, meaning, if you go in the

World of Warcraft, there’s a whole slew of activities that you can do, in terms of going on

quests, following stories, going on different journeys. Ultimately, just like in Real Life, people

want to be recognized for accomplishments and be rewarded for success of those

accomplishments.

One of the things that we’re looking at is how do we start to embrace that as more of the

environment so that it’s not just socializing? And today it’s playing a dance--like we’ve

layered in a dance game, and we actually have a reward system for that, but I think we can

expand on that and grow it and make it a more powerful experience for people because,

ultimately, it’s about engaging and socializing.

ROBERT BLOOMFIELD: Steve, I think you have another question. Let me say, for the

people here at Emory, you can just get Fleep’s eye/Chris Collins from the University of

Cincinnati; she’s got the mic. No one will hear you if you don’t have the mic, so it’s the

magic power stick. Just get her eye, and we’ll get your question in. Now, Steve?

STEVE ATLAS: The second question comes from Harper Erisbird(?), and I apologize if I

mangled your name. This question is for Zee, and the question is regarding Linden’s

position on whether or not it sees what it’s created here as Second Life as being a product

or whether basically how they value the importance of the development of culture and

economics in Second Life, or whether it’s all a product, and whether you feel you have some

degree of control over those and what you feel that appropriate control ought to be.

ZEE LINDEN: I have lost something in the translation here, but I’ll give it my best shot. I

think our vision for what Second Life is probably both as a platform in which you have a

certain set of capabilities such as certainly just the basic simulation of a vertical space, and

then the ownership of land and the ownership of intellectual property. And then, on top of

that, we’ve added features and functionality that enable people to form groups, form

communities, regulate their own plan that could be exclusive to different communities,

whether they be human or otherwise. And then, on top of those things, as part of enabling,

really giving people a reason to create content of the--created, obviously, the virtual

currency, the Linden dollar, really virtual micro currency, you know, less than a third of a

cent per Linden dollar--to really enable people to do things in the Virtual World that certainly

you could do in the real world, but maybe on a much smaller scale, depending on how you

look at, or a bigger scale, depending on how you look at it. And so I think the platform

consists of all of those things.

And then there are certainly [products?] that are existing off of our platforms, such as the

Second Life mainland itself, which some might argue is essentially too freewheeling and

wide open and not regulated enough, to exclusive areas in terms of islands and regions

such as this one where people have a lot more control and could manage their own

experience and that really then could manage their own products inside of Second Life. And

I think potentially that is a set of complex things that we manage, some at the platform level,

and--my avatar was really bored. I think it’s true that, in real life, I cannot look that calm.

I think managing all those different complex elements and all the different complex

messaging around it we’re still just at the early stages of that. I mean it wasn’t more than

two years ago when probably less a million registrations and the idea of having--right now

we have 56,681 people online together when it was a tiny fraction of that not too long ago.

So I think that growth has come largely by the creativity of the residents and the creativity of

what people have come up with to both entertain and communicate.

Personally, I look at it as an amazing educational tool and communication tool, much like

we’re using it for today. And I think, at the end of the day, they’re not content creations sort

of, for example in Skype, but there is idea sharing, but that platforms and all virtual worlds

can enable.

ROBERT BLOOMFIELD: Okay. We’ve got a question here from Intellagirl Tully. Sorry,

that’s a Second Life name in a real-life venue.

INTELLAGIRL TULLY: That’s all right. It’s me no matter where I’m at. It’s okay. We’ve been

talking today about the concept of the Fifth Estate, about sort of--not the mob mentality, but

people talking directly to people and prosumer content and that kind of thing and what Zee

was just addressing. I’m wondering if Linden Labs and Kaneva both could address the

question of whether or not we’re seeing a change in demographic sort of partitioning

themselves off by their inclination to create content or to receive content and whether either

platform thinks that people who like to create content are going to gravitate towards one and

people who like to receive and experience content are going to gravitate towards a different

one.

ROBERT BLOOMFIELD: Well, Chris said he wanted to pass that on to you, Zee.

CHRIS KLAUS: I can go, but I didn’t know which--either way.

ROBERT BLOOMFIELD: Go ahead, then. Whatever. We’ll get you two duking it out soon

enough. So yeah, Zee, why don’t you go ahead and take this one?

ZEE LINDEN: Yeah. I think the way we might think about that is that, in a world such as--

let’s just start with World of Warcraft because they’re not here to defend themselves so

that’s cool. Let’s just gang up on them for a minute. In a world like World of Warcraft, there

is definitely a social element. There’s definitely user-generated content in terms of people

creating accounts that they then sell to others and other things are creating capabilities

[INAUDIBLE] avatar account.

But it’s certainly not just sort of elemental creation from the basics, and there’s certainly no

scripting and things like that. I think that it depends on--the long-term success of a Virtual

World such as World of Warcraft depends on Blizzard or Viacom or [the company?] itself

continuing to produce interesting things for it's user based _____. And they’re doing a great

job of that by launching kind of new classes and doing things like that, and I think that’s sort

of definitely the game mentality. I think, in the long run, I think [INAUDIBLE] and Linden

Labs and Second Life would agree that by opening up creation, even a little bit, you have

the potential to create an environment where people create much more interesting things.

I think the whole Web 2.0--you know, well, Web 2.0 they’re showing _____ certainly in

San Francisco is that user-generated content continues to drive engagement at extremely

high levels that were not possible prior to user generated content. So I think in the same

way that will play itself out in Virtual Worlds.

And then the creators of content they would never cordon themselves off into their own

Virtual World for just themselves because certainly most of the reason people create is to

express themselves. And if there are no consumers of that content, then there’d be no one

to express it to, and then there’d be no reason to create. So I think, from our perspective,

we’re trying to create a platform and a set of technologies that enable the creators and the

consumers to come together for mutual benefit. And, with that, I’ll leave it to Chris to beat up

on World of Warcraft.

CHRIS KLAUS: If I understood the question, is there a difference between the creators of

the content and the actual consumers of the content? Could you repeat the--

INTELLAGIRL TULLY: Is it the kind of person who would habitate a world where they think

it’s great content or the kind that is created for them to consume? Is there a difference

between the kind of people who gravitate towards those? Because I can see Kaneva as sort

of a--I get to experience content, and Second Life is more of a more disorganized content

creation platform.

CHRIS KLAUS: It’s a good question. I think what we see is, in large, most people like to

consume content. I’d say a hundred percent of people like to consume the content, but

within any community there’s some percentage--and I don’t ever imagine that it’s even close

past--I’d be surprised if more than five percent of any community is truly ever going to be

content creators, unless it’s a community specifically for content creators. Like if you’re a

musician community that creates music, then you’re going to probably have a hundred

percent of music creators.

But in general--like I know in Kaneva--you could look even at YouTube where there’s a good

example where--is everybody an uploader? It’s like less than .1 percent. I think it’s probably

even smaller than that, that are the actual uploaders.

The exciting thing is, when you do open up the sandbox or the door for people to contribute,

those that do contribute, not all of them have to upload great content. You only need a

handful, and then I think it’s on the community infrastructure to help guide and bring the best

content up to the front.

So what we’re looking for is ultimately enabling the community to create content and then

providing necessary infrastructure to allow those that do consume content to find the best

content that has been created.

So I really see it almost going together, and you can see this model playing out whether it’s

YouTube or even Dig. Is it content that’s being created? The entire Dig--everybody here

familiar with Dig? Everybody? Okay, good. Ultimately, Dig community doesn’t create the

original articles; they’re just out there tagging to it. But that whole tagging system of finding

great stories and then having the community thumbs up and everything else is--there’s a

whole hierarchy of people who create the tags to people who are voting on the tags to

people who just read the front page of the stories. I think you’ll find in any community similar

type infrastructure to support creators morphing all the way up to just consumers.

ZEE LINDEN: I think to add onto that, Chris, you’re highlighting the different kinds of

content that’s being created, and I think it’s real easy to think of content as just an object or

a script that you interact with or textures and things like that. But these are the components

of the Virtual World, if you will, to stretch an analogy. And I think what Virtual Worlds really

do is--it’s so funny to watch you still talking on the screen while I’m trying to say

[something?]. I think what this sort of event demonstrates is that people getting together and

sharing ideas is content creation. And I think, in the Real World, certainly a portion of people

who build buildings is very low.

But the proportion of people, like no other time in history, people all over the planet have the

potential to create ideas and share ideas, and I think that’s where Virtual Worlds become an

unbelievably amazing medium for people to create and share ideas. And ideas as content is

really kind of what’s most exciting to me about the space in general.

ROBERT BLOOMFIELD: We have a question from Arabella Ella in Second Life.

STEVE ATLAS: Arabella Ella asks, “How do you see the future of Virtual Worlds where

education and educational institutions are concerned, keeping in mind the fact that

educational institutions often appear to be at least ten years behind the times due to lack of

resources and bureaucratic constraints?”

ROBERT BLOOMFIELD: I’ll try not to be offended, while Chris, I think, wants to answer the

question.

CHRIS KLAUS: I get excited about the space of, I guess, education and learning, and I

think ultimately you don’t need to have every educational institution moving at the same

pace. Actually, I think ultimately you’re going to see this kind of forum, and you’re seeing a

lot of people starting to come together to discuss this around learning, education. There’s a

lot of forums going on, but I think--you asked where’s it going. Ultimately, the exciting part is

that classrooms haven’t changed in the last 200-plus years. Typically classrooms have

been--here’s a physical classroom and a chalkboard and it’s turned into a whiteboard. And

now, over the next five years, I think we’ll start to see classrooms scaling--and this is where

really technology kicks in, where, instead of teaching a class of a hundred students, can we

have a classroom where you have the best subject matter expert in a certain field teaching

and presenting a class to a classroom full of a million people? And I think that’s where

technology really kicks in. You’re slowly seeing people starting to talk about it.

There’s actually a lot of exciting things happening, and I think Virtual Worlds--right now

we’re still playing around with the technology. We’re figuring out what works, what doesn’t

work, why isn’t it working, and almost all the things I hear about why doesn’t it work are

things we can easily overcome. It’s going to take some time. We got to discuss it and figure

out because, ultimately, it also depends on the audience. You got university students. Some

of the participants in this forum actually do teach online classes or a hybrid class where

they’re teaching a real class and a virtual class, where their students are out somewhere out

over the Internet. But I think ultimately that model is going to continue to be looked at and

figured out how to scale it.

I know talking to quite a few universities, even in the Georgia area, there’s a lot of

excitement, a lot of interest. Almost every large university I’ve talked to has said, “We’ve had

to move outside of the boundaries of Georgia.” And now they have campuses in Europe and

in Asia. Globalization is happening, not just in business but in education. And I think as

businesses are learning how to adopt telepresence and teleconferencing, that will also be

manifested as well into the research and educational settings.

ROBERT BLOOMFIELD: We have a question here in Atlanta.

RISA: Yes. My name is Risa--and hopefully this is working. If you’re saying the purposes of

creating Virtual Worlds is to really construct creative spaces, that maybe ideally you

accelerate the rate at which people are creative, then when you’re mixing Real Life and

Second Life, like profiles from a linked-in, do people congregate because they like the

constructed space or the platform in the Virtual World? Or are they still associating based on

what they see in a real-world profile?

ROBERT BLOOMFIELD: So then an identity question here?

RISA: Yeah. Is it more identity, or is it that, in a Virtual World, you can create a place that

otherwise doesn’t exist?

ZEE LINDEN: Can I answer that?

STEVEN ATLAS: Go ahead. Sure.

ZEE LINDEN: Yeah, this is John. I think we see all sides of it, right? I think there’s people

who come in and bring their friends from the real world, and then there’s people who come

in and find friends in the Virtual Worlds, in terms of the groups that they like to associate

with. And I think all of that is happening.

And just to go back to the educational point a little bit, I’m not _____ to be here. I don’t think

it’s going to take ten years for educators to kind of figure this out. I’m just looking here,

basically, [read that here to the customer listening?], Chris. The University of Iowa,

Ravenna(?) public schools, Nauset(?) public schools, the University of St. Andrews, the

University of Florida, the University of California, Hawking College, University of Denver, the

Museum of Design in Zurich. These are orders that have sort of come in the last five days.

And we’re certainly not out there selling at all, and I think what’s happening is not that the

university isn’t making decisions about these--and that’s why I don’t think it’s going to take

ten years. I think it’s individuals who are seeing schools, virtual worlds in general, Second

Life in particular, that they could use quite generally. So I think it’s because these things

could become tools of the individual that education can and will have accelerated at this

quite quickly. And I think people are getting a lot smarter about how those things work.

And the same way--back to the question--I think people do bring a lot of who they are into a

virtual world, and there’s also people who try to escape who they are in the virtual world.

And I think both are valuable and appropriate for different kinds of people depending on the

situation.

ROBERT BLOOMFIELD: Yeah. And if I could just add to the number of educators who are

in Second Life. One of our event partners is New Media Consortium, which is a nonprofit

organization that--I guess I’ve no idea how many organizations are officially involved with

them, but I do know that it’s, I believe, in the hundreds--and in Second Life they have, just in

their group, NMC members, I believe, is somewhere around 1,500. And then NMC guests,

educators who are not actually members of NMC, is another, I don’t know, 3,000 or

something. You can check that.

WOMAN: There’s 4,500 people [around?] [INAUDIBLE]

ROBERT BLOOMFIELD: So 4,500. Yeah. So maybe we’re not as slow as all that.

I’d actually like to change gears a little bit, if we could, because there are some major trends

that are bigger than these two worlds, and I’d love to hear your thoughts on these issues.

The buzzwords I’m thinking of are, first of all, open source, open standards and

interoperability.

When we think about the future over the next ten, 15, 20 years of this technology, this is a

pretty politically charged issue, and there are a lot of people who believe that the industry

can’t move forward without some combination of open source, open standards and

interoperability. So could you both just sort of weigh in on how you see your companies’

perception of these trends? Chris, you want to start?

CHRIS KLAUS: Sure, I’ll go first. I think ultimately the more successful platforms will be

open. I think they have to support open standards and be interoperable with all the major

components with what is the infrastructure of the Internet. I think we’re at the early stages

and, like any technology, you kind of start off building it and seeing what happens and what

the value is.

And then, as you start to adopt and get customers, the natural evolution is, “Hey, can you

make this work with something else?” Initially it’s, “Hey, does this thing work?” And then

you’ll see companies demanding that it has to work with all the other infrastructure that

they’ve acquired. And either you make your platform open or you probably will get

subjugated, or some other platform that is more open will come along.

I know for our platform we are looking at open standards and being part of, Rob, your

organization, with interoperability. I think IBM is also taking a lead there to say, “Let’s

discuss what are the things that are important for interoperability.” Everything from the data

formats of the world to how do you connect one avatar or one identity to another world.

The good thing is you’re starting to see with Web 2.0 almost all these platforms are opening

up API sets and allowing others to connect in to their platforms. Not so long ago you could

say the web world was never interoperable between identities, and now you’re starting to

see a lot of the major portals, and Internet players like Google and Yahoo and Microsoft

adopting OpenID, I think, is another standard that’s emerging. So I would imagine all these

worlds, over time, will end up supporting them.

I think we've got to decide what are those standards that we got to support. Some of them

don’t exist today, in terms of we’ve got proprietary stuff. I’m sure Second Life has proprietary

components as well. But, long term, I think everybody who’s looking at this business has to

open up and has to connect beyond just their small little platform.

ROBERT BLOOMFIELD: John?

ZEE LINDEN: Yeah. I’m not sure there’s a ton to add to what Chris said, except I think he’s

right on. I think the there’s a general feeling, certainly at Linden Lab, we’ve open-sourced

our viewer, and I think we’ve got tremendous success with that effort. I think there’s also

open-serve, open-sent types of environments that are coming online and are definitely

pushing the envelope of technology there as well. And I think, of those, we couldn’t agree

more here. The more open worlds are going to be the ones that are more successful in the

long run.

And then it’ll be interesting to see if you think the regulatory issues around managing inside

just Second Life itself are challenging, I think the concept that you could be taking inventory

between worlds and land on different levels of permission systems and things like that, on

different levels of trust, I think those are issues that are going to make it more challenging

sort of than certainly just agreeing on technology standards. Not insurmountable by any

stretch of the imagination.

I think there’s a lot of really smart people in lots of companies, from Intel and IBM down to

Linden Lab, trying to help figure this stuff out, what’s going to make it all work. And I think, at

the end of the day, the more open and the more accessible those technologies, certainly at

the lowest levels, then the more applications are going to be developed, the more

successful certain areas will be.

ROBERT BLOOMFIELD: Great. Okay. So we’re coming up at the end of our time, but we

do have another question from Atlanta, and if we could just keep the question and the

answers somewhat brief, we’ll have time to get in another one.

MAN: I’m going to call this a crystal ball question and ask the following: Assuming the best

of worlds, increased participation, increased access by the general public, successful

business models, maybe Internet 2 or 3, moving forward, how do you see, in five years, the

experience in Kaneva or in Second Life changing or evolving? How will it be different than it

is today?

CHRIS KLAUS: I’ll answer that question from my point of view. I guess, as you empower

the community to do and create extensions to what you’re doing, the answer is, you have no

idea, right? And ultimately you could guess at what the crystal ball may look like, but when

you’re enabling millions of people to go into the world and then ultimately millions of people

to create stuff, I think at a higher level, though, some of the themes that are important to

probably look at: One is Gartner Group. Everybody know Gartner Group here? Okay, good.

Gartner Group basically has come out and said by 2011, which is not too far away--less

than five years--250 million people will have an avatar and be in Virtual Worlds. So that’s

their prediction and that they think 80 percent of all active Internet users will be in these

Virtual Worlds by 2011.

Within that, I also think, as these worlds are being created, almost every large--you just look

in the entertainment space. Disney World for example, has already announced they’re

committing over $100 million to create ten new worlds specifically to different themes or

properties that they own, from Pirates of the Caribbean to Club Penguin. They spent close a

billion dollars on Club Penguin, so they’re pretty serious about this world phenomenon.

And I think ultimately, if you ask me where is the worlds going, I think we’re going to see a

similar parallel to asking somebody in 1994 or 1995, “Where is the web going? What’s going

to be happening? Now that there’s this web browser and there’s a web server? And five

years from now, can you predict what will happen with Web sites?”

And I think nobody would have predicted an Amazon, a Google, an eBay, but ultimately

those did manifest themselves using this new technology platform. I think we have the same

potential to see new businesses and new thoughts scale and become exciting with the

Virtual World platform.

So the answer to crystal ball is, it’s going to be bigger, and specifics, I think, are going to be

left up for everybody with any imagination coming up with ideas, as John was talking about,

and they’ll pursue whatever makes sense in the Virtual World.

ZEE LINDEN: Just to put a ten-second wrap around that one, I completely agree. I think

that actually--I don’t know if it’s five years or ten years or 20 years, but we’re on a trend that

says that Virtual Worlds will be profoundly normal and that combining the technologies that

we’re combining today to make this possible will be easier and easier, and people will use

them rather commonly to bring people together from all over the world.

ROBERT BLOOMFIELD: If I could just add a quick followup to that, “The children are our

future” is the expression and, in fact, kids are in Virtual Worlds in a really big way. So I’m

wondering, for both of you, how you see that affecting progress, both from a business

perspective and also from a policy perspective because, as more kids get involved in this,

more people get concerned about kids getting involved in it.

CHRIS KLAUS: Well, ultimately I think, as you said, already kids are in these Virtual

Worlds. As a parent, I’d recommend making sure that your kid has picked the right world.

Just like there’s different TV channels, and there’s different programming, and there’s

different movies. The same is true with worlds in general. There’s worlds for kids and, even

in there, the worlds for kids have various levels of security. Some of them allow you to chat

to anybody. Some of the worlds are very constrained in who can chat with whom. Like

Tune Town is restricted to a preset of communication of selected dialogue. And so

ultimately there’s various levels of security and protection around the kids.

And ultimately for us, we’re targeting an older demographic than the eight-year-olds and the

ten-year-olds. We’re targeting, really, 18 to 34. I guess the good thing is we know that the

kids today that are playing these games will, hopefully, mature and not want to keep playing

Club Penguin. When they’re 20 years old, they’ll start to see a content that’s more

appropriate for them. And I think that’s where ultimately the opportunity arises. That as they

graduate from Habbo Hotel and other worlds, we’d like to see them be a part of our world.

ROBERT BLOOMFIELD: And, John, we’re basically out of time, so you get the last word.

ZEE LINDEN: Well, I’ll just say thank you. I think you guys have put on a great panel here,

and I think there’s so much exciting stuff going on in Virtual Worlds, there’s no way we could

cover it in just a short period of time like this. It’s great.

ROBERT BLOOMFIELD: Okay. Well, thank you, John Zdanowski, CFO of Linden Lab,

Chris Klaus, CEO of Kaneva. Benn, you’ve been here all day, and you told me I didn’t have

to give you too much time on this.

BENN KONSYNSKI: Hi.

ROBERT BLOOMFIELD: But this is your conference. I want to thank you, especially, for

putting this together. This has really been spectacular, and you get the last word.

BENN KONSYNSKI: No. I really just want to thank everyone. I expressly stated to Rob that

the dialogue and multilogue going on with John and Chris was infinitely more important than

hearing more from me on this. But thank you all. I hope everyone sees the promise and

potential. It’s not only in Virtual Worlds, per se, but the immersive technologies that make up

these activities are going to be legion around the evolving Internet space. So it’s an exciting

opportunity. I hope everyone has seen the potential, and it’s excited some elements for

each of you. Thank you. Thanks, Rob.

ROBERT BLOOMFIELD: Yes. Yeah. Thank you so much.

Document: cor1006.doc Transcribed by: http://www.hiredhand.com Second Life Avatar: Transcriptionist Writer