Three months ago, I had no idea what a virtual world was, much less what Second Life was. Now after logging in and creating an avatar for now too many worlds than it seems I can even count, I am convinced that I have learned more about business and virtual worlds in this internship than I learned in an entire semester of high school biology. It’s been quite a change.

On the one hand, the concept still seems strange. Why spend real dollars on items inside a world that doesn’t even exist? It seems very backward. One other surprising aspect is how fact these worlds have grown. Two years ago, many of these worlds hardly even existed. Now, many worlds have more than a million users.

Second Life, arguably the biggest out of all the worlds, has a population of over 8 million. While many of Second Life’s users have more than one avatar - the number of unique users in Second Life is closer to 2 to 3 million, rather than 8 - anyway you cut it Second Life’s user base growth is incredible. Perhaps even more incredible is the fact that more than 50 companies have launched projects in-world as advertising ventures, even though there is still relatively little research that has been done on the advertising potential of these worlds.

This in itself is interesting to me. Why would companies like Coca-Cola and Nike, which can (and does) advertise in any medium that it so chooses, decide to invest in a world that’s still a relatively unknown entity? It at first seems like a gamble. I think one reason is because five to ten years from now companies don’t want to look back and realize they missed the boat on something big. As a result, lots of companies have gambled and established presences in-world. This has in turn helped these worlds grow, which may very well make it a worthwhile investment for the dozens of companies that have gotten in.

I’ll be very interested to see how virtual worlds progress in the coming years. Some still predict that worlds like Second Life are simply a passing fad and that soon the supply of these numerous worlds will outweigh the demand. Others say these virtual worlds will become what the Internet was in the 1990’s, and we may see people worried more about their virtual worlds than their real ones. (Who needs expensive beach front property when the market in Second Life is far cheaper?)

Realistically, I think the future lies somewhere in the middle. I don’t think we’re going to see virtual worlds become as big as the internet, but neither will they simply fade away and be forgotten in the next six months. Virtual worlds will play a significant role in social culture, but not as extreme a role as some analysts have predicted. It may be that a few of these smaller worlds fold or merge with larger worlds, but I think overall we will see different worlds that target different types of audiences.

In the more near future, I think these worlds will only continue to grow, and more businesses will look to launch projects in-world. Virtually any analyst will tell you that these worlds are far from peaking. It makes sense for media companies to continue to research these worlds, because the demand for advertising will continue to grow, just as the number of users in these worlds. Perhaps the only question is just how much these worlds will grow.