Second Life will become mainstream, says founder

FRANKFURT (Reuters) - Virtual world Second Life has the potential to become mainstream once computers and connections catch up with the aspirations of its creators, its founder told Reuters in an interview on Monday.

A computer grab shows Olle Ivory (L), the avatar of Director General of the Swedish Institute Olle Wastberg, with a visitor in the lobby of the virtual Swedish Embassy in the Second Life June 1, 2007. REUTERS/Kimitsu Yogachi

Despite the fact that user growth is slowing as a wave of publicity subsides, Philip Rosedale believes activity will increase 100-fold as improvements in computers and Second Life’s own systems make it easier and more fun to become a citizen.

“I estimate we’re at 1 percent of total use in 5-10 years,” said Rosedale, the chief executive of Linden Lab, which runs Second Life, comparing its trajectory to that of the World Wide Web, which entered the mainstream in the mid-1990s.

Second Life has established a niche following among fans patient enough to grapple with the technology, but many who dabbled when the hype surrounding the virtual world was at its peak were deterred by the time, effort and technology required.

Second Life has about 13 million registered citizens but only a hard core estimated to number several hundred thousand are thought to be regular visitors.

User hours grew by 15 percent in the first quarter of this year compared with the fourth quarter of last year, to almost 350 million.

Second Life is an online community with its own currency and a growing economy, where users teleport and fly around the virtual world as “avatars” who interact with other computer-driven alter egos.

Global brands including Reuters Group Plc RTR.L and IBM IBM.N set up shop within the virtual world, but many including Time Warner Inc's TWX.N AOL have since left or radically scaled back their participation.

Rosedale said a new generation of computers with more powerful graphics capacities would help stimulate wider interest in Second Life, where avatar models representing users fly or teleport around and can buy and sell land in Linden dollars.

“You have to wait out the PC retirement cycle,” said Rosedale, who plans to step down as CEO to concentrate on product development and strategy.

He said he wanted to spend more time on improving Second Life, for example by making it easier to learn how to fly, walk and exchange money and to find things and people in the three-dimensional virtual world.

Rosedale said he was close to finding a new chief executive for Linden Lab. “We may have some news in the next few weeks.”

He declined to say whether the person was likely to be an insider or an outsider but said the new CEO need not necessarily have a software development background.

Rosedale, visiting Germany on a tour of Europe -- Second Life’s most important market outside the United States -- said the appointment of a new CEO should not be taken as a sign that a public listing was imminent.

“There’s no change in the strategy there,” he said. “We can go public any time we want. Revenue is growing with users. We’re profitable. We have the luxury of waiting.”

Linden Lab, whose backers include Benchmark Capital and Omidyar Network, does not disclose its revenues.

Rosedale said Second Life’s failure as yet to reach a mass market had partly to do with the unexpected rise in popularity of laptop computers, which are typically less well equipped to process three-dimensional graphics than desktop computers.

"When we started the company in 1999, it was obvious that broadband would become widespread and at the same time Nvidia NVDA.O released its GeForce2 (graphics chip)," he said.

“What we didn’t anticipate was Wi-Fi and the rise of laptops, which couldn’t do 3D.”

Asked to explain the appeal of Second Life -- which has no game-like aspects such as points-scoring, winners or losers -- Rosedale said: “The only thing that SL users have in common is that they have a lot of time.”

Users in big cities such as New York or Los Angeles were least likely to spend time in Second Life, not only because they were busy but because they had less need to escape to an alternative, anonymous world, he said.

“Bad weather, oppressive regimes, poor economic conditions -- that’s what makes an SL user.”

Editing by David Cowell