Your Own Little Slice Of Nothing
Issue 31 - June 07



How the internet has taken over the world and why real estate just isn’t what it used to be…

On arriving at the website secondlife.com, in prime position, just next to the anatomically impossible siren with the big guns and blue hair, is a column of statistics. Apparantly, over one and a half mil US dollars’ worth of transactions took place on that website in the last 24 hours. Just on the left of the screen there is an encouragement to buy land. That’s right, virtual property. Citizens in this “Second Life” can buy real estate for all the same reasons you would want to own property in real life: “on which you can build, start a business, entertain and live”. Except that it doesn’t exist, it is virtual land hosted on a server in a datacentre somewhere.

Second Life, for the uninitiated, is an online community where users sign up, create a virtual self (called an avatar) and then can move around the virtual world
doing anything you can do in the real world, as well as many things that you can’t, such as flying and completely changing your appearance at whim. It might also interest members of the real real estate industry that Second Life has been described as the most hotly traded real estate market on earth with 72 mil sqm having changed hands in April alone.

Land in Second Life is comparatively cheap, primarily, one would suppose, because it isn’t real land. However, it has many of the characteristics of real property. One of the big plusses of Second Life real estate over the stuff we deal with in the real world is less of the administrative trouble coming from things like title concerns and mowing the lawn.



It should be noted, however, that property does come at a cost, a piece of land
modelled after Amsterdam recently sold on eBay for US$50,000. The sale of land
and associated services make Linden Labs, the owners of Second Life, around 85 percent of their profits, said a spokesperson for the company. The concept is as it does for governments or any other large holders of land, except in Second Life the number of islands (US$1,675 for 16 acres) Linden Labs can create and sell is virtually limitless. Plots of land on the “mainland” of Second Life are priced on a sliding scale and are then bought or sold at a profit after building improvements. Property concepts in Second Life are course-work for first year Property Law students at Seattle University (the real one).

During the initial tutorial for entry into Second Life newcomers are also reminded that “every house, club, store, gallery, or park” avatars visit is created and owned by residents of Second Life. However, like in the real world, the owner of the land can’t be expected to manage the design and construction and, yes, landscaping of a building alone. Second Life property developers are a combination of developers as they exist in real life and software developers, because the materials they work with are created by software programs. Developers come with different specialities and levels of capability: One developer, Terramesh, specialises in complex projects for “huge and detailed buildings with realistic textures”. Project and construction managers would do well to look into the way these projects are planned, designed and delivered compared to their real world counterparts.

testing ground
Real world developers, retailers, architects and real estate companies, which previously relied on good-old bricks and mortar real estate for their living, are now
also benefiting from business opportunities in Second Life. The hotel group Starwood test designed its new hotel chain, Aloft, in the space for less than it would have cost to do a real mock up, but in many ways better because the whole hotel experience could be replicated. Virtual avatars tested the look, feel and functionality of the space. Features now incorporated into every Aloft room come from suggestions made by residents of Second Life.

One of the big plusses of Second Life real estate over the stuff we deal with in the real world is less of the dministrative trouble coming from things like title concerns and mowing the lawn.

Features now incorporated into every
Aloft room come from
suggestions made by
residents of Second Life

Many other companies use the space as a marketing or testing ground for activities in the real world. A development company that runs retirement villages
has been putting together and testing a prototype for an assisted living community. American Apparel has a store (clothing trade in Second Life is high),
where discounts can be gained in the real world. Jon Brouchoud, Architect, crescendo Design, a company that uses Second Life to demonstrate their green
home building design, says: “Although there are architecturally driven visualisation programs out there, nothing gets you down into a first-person perspective like this.” According to the Second Life marketing materials: “Second Life lets you
have an on-going presence in the world, for your home, your business, or whatever other special place you’ve created. Even when you’re not online, your friends or customers can stop by to leave you a message or shop for your latest creation.”

Many companies use Second Life for recruitment purposes and one of them is Second Life’s first real estate agent. Coldwell Banker Real Estate Corporation is the first national real estate company to sell homes within the online community. In its press release the company boasts: “Offering houses in a variety of architectural styles and the ability to tour neighbourhoods with a real estate professional, Coldwell Banker is reinforcing its mission to ensure that everyone can achieve the dream of homeownership, whether on Main Street or in the metaverse”. Charlie Young, Vice President, Marketing says the advantage Coldwell offers customers is “Rather than having to negotiate for top dollar with Second Life ‘land barons,’ users can visit our virtual office and interact with our
virtual sales associates to buy homes from Coldwell Banker at reasonable rates.”

other real estate effects
Coldwell also uses the site to monitor who has been to their in-world HQ and tracks data of sales and trends that can be used in the real world. Predominantly IT companies, notably Sun Microsystems, IBM and Cisco, also see value in the space not just as a recruitment ground but as a place they can hold meetings with
geographically disparate colleagues. Asian countries are up there amongst registered users with Japan being in the top ten and many others, notably Korea and China not far behind.

Online meeting and video conferencing is no longer new. But for many ompanies, harnessing the power of the internet takes time and effort and complicated
technology, whereas Second Life is perceived as fun. Generally companies buy an island in Second Life and give employees a time and date to meet there. To use Second Life language, “In-world” meetings can throw up some protocol problems, such as how does one dress or know the identity of other participants. For this reason Cisco provides a “business appropriate” avatar attire shop and all in-world employees have the surname “CiscoSystems”, which hovers over their head as their avatar’s name.

So popular is the trend to hold meetings, “in-world” locations that software have been created for delivering presentations and training sessions online. Great America Conferencing offers a conference venue marketed on the fact that in-world events increase productivity of workers by cutting out real world travel time. Announcing their offering they say “We currently offer a Moroccan based theme that will literally “wow” your conference participants.”

not just second life
This trend towards online meeting is something that trade show and events organisers and venue owners are watching closely. Reported to be the “business friendly alternative to Second Life”, the Unisfair platform is also a graphics driven online meeting venue. If successful the platform is far more effective at providing qualified sales leads than any real world conference or exhibition. Sponsors, attendees and exhibitors can move around the virtual space and their movements can be tracked, profiles logged by exhibitors and reports made up based on the type of company, the individual’s areas of interest and stated equirements/budget.

This trend towards online meeting is something that trade show and events organisers and venue owners are watching closely.

Unisfair offers a booth creation wizard, notifications when webinars are about to
start and the ability to speak to other participants using voice over protocol (VoIP)
technology. The whole thing stays online for 90 days and is open 24/7. From a sales, organisation and travel perspective it is far superior to regular exhibitions and trade shows where countless hours are spent talking to non-prospects and being told by potential prospects that they have forgotten their name cards. Don Best of Unisfair says that it is also ideal for the international market and that the feedback they have had from Asian users has been nothing but positive.

forget meeting rooms?
So should we be dramatically reducing the amount of meeting space we allocate in the real world because this online phenomenon is going to take over? Probably
not yet, though there will be a greater blending of real and virtual spaces. Most real estate companies will still use the internet more as a bill board for their real world activities. Such as Sun Hung Kai, which felt it news-worthy to announce the launch of its website for the new International Commerce Centre (ICC), in Hong Kong. Lo King-Wai, Deputy General Manager of Sun Hung Kai Real Estate Agency Limited emphasises the importance of the website for sales purposes saying it would be “a ‘one-stop’ resource of its [ICC’s] features and amenities to potential occupants”.

In the end, people still enjoy travelling, meeting people and speaking to them face to face. Nothing will ever replace arriving at a new desination, being able to prod and shake. On the other hand, new ways of communicating, viewing the world and learning, particularly for people who are geographically isolated and time poor can only be a good thing. It sounds crazy that people are spending real money and paying monthly building maintenance of up to $195 to Linden Labs. But apart from being just an opportunity to play dress ups or select a new home from a virtual helicopter (thanks Coldwell Banker), there are real life opportunities and lessons. Purchasing “land” in the metaverse my not be your get-rich plan for today, but the real estate professional who has not considered the implications and pportunities the internet offers their business today, risks becoming a poor one tomorrow RFP

NOMINATE NOW

Subscribe Now

Sign Up for Ezine

Past Issues