How fitting, since Second Life, a piece of software which allows users to move "avatars" representing themselves around in a three-dimensional space and decorate themselves and their virtual land, resembles nothing so much as a failed academic experiment.

Linden Lab, the maker of Second Life, has raised $19 million in venture capital from a star-studded list of backers, including Benchmark Capital, the backers of eBay; eBay founder Pierre Omidyar; Mitch Kapor, the founder of Lotus; and Amazon.com CEO Jeff Bezos. But the last infusion came nearly three years ago. The company charges fees on people and companies who own virtual land in Second Life, and also issues a currency, Linden dollars, used to trade goods in-world. Kapor, the company's chairman, told the Financial Times last year that it was "absolutely in the ballpark of profitability."

Second Life may well be on the verge of profitability. But it is firmly headed into irrelevance. It is impossible to imagine another BusinessWeek cover story like the one it garnered in 2006. Reuters closed its Second Life bureau last year. The former bureau chief, Adam Pasick, told PBS's Mark Glaser that there was no longer a there there:

We were primarily interested in Second Life as a business/commerce/finance phenomenon, covering it like we would any small but fast-growing economy in the real world. The bureau is now closed. Essentially the story we were there to cover has moved on.

His reporter, Eric Krangel, who now writes for Silicon Alley Insider, was more trenchant:

The very things that most appeal to Second Life's hardcore enthusiasts are either boring or creepy for most people: Spending hundreds of hours of effort to make insignificant amounts of money selling virtual clothes, experimenting with changing your gender or species, getting into random conversations with strangers from around the world, or having pseudo-nonymous sex (and let's not kid ourselves, sex is a huge draw into Second Life). As part of walking my 'beat,' I'd get invited by sources to virtual nightclubs, where I'd right-click the dancefloor to send my avatar gyrating as I sat at home at my computer. It was about as fun as watching paint dry.

What's left for Second Life? Community meetings, underattended cultural events, and education. CNN uses its Second Life "island" to hold meetings with volunteer reporters. WGBH threw a virtual concert with a grand total of 70 attendees. And the Modern Language Association, that bastion of English-department wonkery, is pursuing the idea of using it to hold meetings.

Imagine a dry academic conference enlivened with a few space-alien avatars. Deans with mohawks and tight leather pants! Only compared to the life of a university professor might Second Life actually seem exciting. We look forward to the news that Linden Lab has sold itself to an academic consortium. It's where the virtual world belongs.

Palestinians and their terrorist sympathizers streamed into Second Life Israel last week, as Real Life Israel launched missiles at Real Life Gaza. The aggrieved protesters promptly began destroying the quiet peace of the digital holy land, carrying signs and shouting obscenities at passing Jewish furries.

Second Life Israeli officials promptly beat back the threat.

Ms. Odets helped create SL Israel, so she maintains land permissions to the region. She began ejecting the most obstreperous protesters. "I had to be careful not to boot people who didn't actually do anything wrong," as she puts it. But the protesters kept coming, and eventually she felt forced to close all of SL Israel to outsiders. "Just shut it down for a little while. Just to make it stop. 'Cause people weren't wanting to be logical, or talk."

An intrepid reporter—truly a Second Life Joe the Plumber—ventured into the disputed territories and brought back reports of impassioned political debate between a Jew, a Muslim, and a rabbit named Shmoo Snook.

The movie business has always been late to catch on to trends. But the swift shifts of technology make the studios' sluggishness all the more embarrassing.

Universal and Pirates director Gore Verbinski have acquired rights to make a movie from a Wall Street Journal article written in 2007 about a woman virtually widowed by her husband's Second Life addiction.

The problem: Ric Hoogestraat, the subject of the story, makes an unappealing leading man: He's a 53-year-old homebound diabetic. And Second Life, the virtual world in which Hoogestraat's hunky avatar, Dutch Hoorenbeek, "married" a user who was not his real-world wife, makes for a lousy villain. How do you make a movie about a place where nothing really happens? Once Verbinski gets to understand the boring porn-and-kink-filled universe of Second Life, I suspect he'll discard that whole angle. And he'll also drop the notion of an unattractive lunk as the hero. And then, if he doesn't drop the whole idea, he'll make a movie that really has nothing to do with Second Life at all.

We should have expected this, though. I asked Chris Null, the editor of FilmCritic.com, for suggestions on just some of the technological trends Hollywood has missed. Here's the list we came up with:

Movie: Hackers (1995)
Trend: Errr, hackers.
Why it was late: Hackers had been a known media phenomenon since 1971, when Esquire published a feature story on phone phreakers. By 1995, the Internet was making hacking tools so easy to distribute that amateurs known as "script kiddies" were taking over the scene. But hey, the movie had Angelina Jolie!

Movie: You've Got Mail (1998)
Trend: Email
Why it was late: An AOL inbox was trendy around 1990. By 1998, most people worth knowing had bozofilters set on anything from an @aol.com address. And movies with Meg Ryan.

Movie: American Pie (1999)
Trend: Webcams
Why it was late: The Internet-broadcast deflowering of the main character, Jim, relied on technology that was an Internet-culture phenomenon in 1996 (remember JenniCam)?

Movie: Chat Room (2002)
Trend: Chat rooms
Why it was late: The first text-based chat room dates back to 1974, but the notion of cybersex hookups was commonplace by 1998. The first example of deception in the course of a courtship is a few millennia before that. The first and last usage of the phrase "surfin' for cyber bootie" dates to 2002.

Movie: Cellular (2004)
Trend: Cell phones
Why it was late: The cell phone was invented in 1973, or 1944, depending on whom you ask. But the idea of cell phones as a means of rescue permeated society after September 11, 2001 — which is when this Kim Basinger kidnap thriller might have felt timely.

Movie: Firewall (2006)
Trend: iPods
Why it was late: Portable MP3 players had been widely identified as a security risk by 2004, making Harrison Ford's $100 million iPod heist implausible. Plus we'd moved on to Nanos by then.

The notion of a metaverse has long fascinated geeks. The idea of "avatars" — three-dimensional representations of the self rendered in pixels, often fantastical or surreal in nature — wandering through a computer-generated environment has been explored in the science-fiction novels of Neal Stephenson, William Gibson, and Bruce Sterling, among others. The Matrix trilogy introduced the idea at multiplexes from coast to coast.

And yet unreal worlds have never taken off in actual reality. Philip Rosedale, the creator of Second Life, once showed me screens at the headquarters of his company, Linden Lab, which monitored in real time the number of people logging in. They peaked at 50,000, the maximum simultaneous capacity of its servers. That's not a virtual world; that's a midsized town.

Anecdotally, many of Second Life's users are there for virtual sex. (The company has banned gambling, so there's little other reason to go there.) The PG-rated Lively, censored by Google, did not even have that; its only draw was innocuous chat, with the occasional subversive attempt by users at raciness.

No wonder that news organizations, drawn by the visual appeal of the service's 3D graphics, aren't writing stories about Second Life anymore. Reuters, at the height of the frenzy, opened up a bureau; its Second Life correspondent stopped filing copy since September, having left to write for a blog, and the wire service has not replaced him.

The most recent noise to come out of Second Life has been an uproar over price hikes. Second Life users periodically hold colorful protests in the virtual world — probably the most entertaining thing that ever happens there — over this new rule or that new rule. They are likely to become more frequent, as Linden Lab, to survive, focuses on squeezing more revenue out of its existing customers, who pay the company "taxes" on their virtual real estate and convert real money into the company's imaginary currency, Linden dollars.

Online 3D environments are not a fad; millions inhabit them for hours, sometimes days at a time. But they do so in networked videogames like World of Warcraft, where there's a clear purpose to being there — even if it's just having fun and wasting time. Second Life, Lively, and virtual worlds like them amount to glorified chat rooms, and while chatting is a fundamental human activity, it's hard for anyoen to make money on it.

The first thing to get cut in everyone's ad budget was "experimental" ad buys, random things like branded pop-up games and ads in Virtual Worlds and other, mostly online things that probably never worked in the first place. Also getting chopped: mobile ads that go straight to your cellphone—which not only don't work, but actually annoy the consumer in the process of not working.

Areas like mobile, virtual worlds and widgets are expected to be hit particularly hard, as it remains unclear what kind of impact ads in these media have. These campaigns often reach a small number of people, and standard measurement systems have yet to be developed. "When we get into the need to drive results, you can't spend money on the experiments and hope to keep your job and get your sales goals"...

"Virtual worlds are probably one of the things that haven't been proven effective just yet. I can't see us selling virtual worlds to anybody right now," says Lars Bastholm, an executive creative director at independent digital marketing shop AKQA.

Good news for nerds of the purist variety! [WSJ; pic via FPSrantings]

Scratch that last one: Even the winged-phallus contingent has given up on Second Life and moved its penile protestations back into the real world. Internet politics has yet to prove it can reliably turn up voters willing to put on pants and leave the house to vote — the Second Lifer group on Barack Obama's social network has made all of 6,652 calls and raised $19,355.66.

IBM is using 2L-like programs to indoctrinate far-flung employees in places like China and Brazil. A terrific way for IBM to give itself the same image employees associate with bad acid trips! And here's a good time:

In September, Xerox used Second Life to enable about 20 out-of-town employees to virtually attend its 2007 International Women's Conference in Rochester, N.Y. While some 570 people, mostly Xerox employees, attended the event live, a parallel track took place in Second Life. Virtual attendees watched streaming video of the conference and interacted through text chat.

My, if that doesn't sound like the single least fun corporate event that could possibly be inflicted upon an employee, I don't know what does. It's time for BusinessWeek—and their corporate dead-ender followers—to stand up and boldly say: this thing is stupid.

[BW]

In our user research, we’ve been amazed at how much more poignant it is to receive an animated hug than seeing the text “[[hug]]”.

In the promotional video, the characters looke a bit like the anime-styled Yahoo Avatars. I can only hope Google's thought to include leather-daddy apparel, having released the product during Pride month.

A quick check of Alexa shows that traffic to the secondlife.com — where new users sign up and download the software — is flat if not down, and still well behind worldofwarcraft.com, which is nearly as old and far more popular. While Second Life allows you the freedom to do anything, and I mean anything, you want, consumers have made their choice when it comes to virtual worlds, and they've chosen manicured gardens and not libertarian free-for-alls populated by flying penises.

Sure, my avatar's screwed around in the virtual world once or twice, but that's generally about all any of Linden Lab's reported 10 million users have done. I'm sure for those suffering from autism it's a magical experience, not to mention those suffering from a lack of PhD thesis ideas and technology journalists looking for something to playfully mock. In the end, it's that latter that I'll miss about Second Life most as it slides into the dustbin of history. People just don't laugh at punchlines about Goreans like they used to.

What doomed the virtual world? The lack of graphics development, for starters. The engine has improved little since it started, and it certainly won't attract any new users used to the finely rendered worlds in today's high-end console and PC games. Crappy American broadband didn't help, since every change of viewing angle required a whole new batch of data to be downloaded. And trying to attract business from advertisers in order to shill to the occasional transhuman passerby, as opposed to support robust development of things to actually do beyond gambling and ponzi schemes, didn't help make it a sticky experience.

I don't blame most of the folks at Linden Lab, who seemed to suffer a shared delusion inspired by one too many readings of Snowcrash, possibly too much MDMA and certainly the cultishness founder Phillip Rosedale fostered. I do, however, blame the boosters from without who took every usage statistic and brave new world vision that came out of the company's Barbary Coast offices seriously. Sorry, but Valleywag told ya so. (Image by Torley)

An outside estimate of how much a Second Life brothel owner may make is slightly less than $50K per year — in actual currency. One strip-club owner netted a quarter of a million dollars from her initial $4,000 investment. She's probably the anti-trafficking type's worst enemy, too: a single mom. Good thing she's conducting business Stateside.

Compared to online escort directories, that's chump change. Eros-Guide, for example, has been in business since 1997, and currently collects between $50 and $400 per month from approximately 5,000 escorts advertising, for an annual take of $500,000 even by the most conservative of estimates (not to mention the porn and sex toy ads they run). Review boards like TER and Redbook have a different business model, soliciting membership fees ranging from $100 to $180 per year from hundreds if not thousands of escort-seeking clients. With so many businesses profiting from just the lead-up to prostitution — from domain registrars to hosting providers — lawmakers may be left asking, who isn't a pimp here? The only crime Second Life is committing is not making more money off the business.

(Screenshot via YesButNoButYes)

I'll be the first to count such outbursts as a sign of growing democracy — Putin and new president Dmitry Medvedev could have just jailed Kasparov like former Yukos owner Mikhail Khodorkovsky. In the opening of the video featuring Kasparov, his bodyguards jump at first, presumably expecting something more menacing before swatting it out of the air. I asked Terdiman how he thought the situation was handled, as he was one of the first people to confront the flying penis menace, but he declined to offer an opinion.

Kasparov, for his part, was unperturbed and said (approximately translated) "we should be grateful that we've been shown one more time that we need to raise the level of political discourse" to applause from the audience.