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Second Life gets a reality check

Amy Scott Jan 5, 2007

KAI RYSSDAL: When the Democrats took over yesterday, the action wasn’t just in Washington. Residents of the virtual world Second Life could watch the events unfold on a simulated Capitol Hill.

Congressman George Miller of California even held a press conference there. Or at least his avatar did. Frankly, it’s all a bit confusing. But it is completely clear politicians are trying to cash in on the Second Life phenomenon just like many companies are. The site has more than 2 million users. Or does it?

Marketplace’s Amy Scott reports the virtual world may be in for a reality check.

AMY SCOTT: It’s true Second Life boasts more than 2.3 million residents. But that refers to the number of avatars — or online personas — people have created. Clay Shirky teaches technology at New York University. Recently he started questioning how many real people actually use the site. Yesterday a reporter from Fortune got the numbers from Second Life owner Linden Lab. Shirky says just 1.5 million people have actually tried Second Life. Only 250,000 have returned a month after signing up.

CLAY SHIRKY: So these aren’t terrible numbers, but it’s certainly a much more modest success than we’ve been led to believe by the business stories saying “there are millions of people using Second Life and it’s growing by leaps and bounds.”

So why does it matter how many real people inhabit a fake world? Well, remember that tech bubble that popped a few years back? Jimmy Guterman writes for Paid Content. He says journalists who fell for the hype were part of the problem. And he’s worried that may be happening again.

Guterman says a recent Business Week cover featured the boyish founder of, with the misleading headline, “How this Kid made $60 million in 18 months.”

GUTERMAN: It’s a result of someone sort of extrapolating what something could have been worth if it were liquid, rather than what has actually happened. And I think it’s sort of a classic example of bubble journalism, where we print what we believe, rather than what we checked.

Linden Lab declined an interview request. But in a statement the company said it voluntarily publishes a wealth of information about its usage. Guterman says it’s our job as reporters to find it.

In New York, I’m Amy Scott for Marketplace.

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