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Vodafone users to chat through Second Life avatars
Could Vodafone Island become a cash cow?

By Jo Best

Published: Wednesday 01 November 2006

Over the last few months, Vodafone has withdrawn from a number of territories - Japan, Sweden and Belgium have all seen the operator wave goodbye. But now the world's largest operator is planning to set up shop in a new territory - its very own island in the virtual world of Second Life - and it's already planning new services for virtual users.

Vodafone's head of brand strategy and manifestation David Erixon told silicon.com the operator is exploring services that will unite virtual and real communication, allowing people to talk through their avatars without necessarily sharing their real personal details.

Second Life - the corporate invasion

Click on the links below to see pictures of some of the many real-world businesses that have set up outposts in Second Life.

Adidas
Nissan
Sun Microsystems
Reebok
Penguin
American Apparel
Reuters
CNET Networks
PA Consulting
Yankee Stadium
Bartle Bogle Hegarty

Erixon said: "We want to find out how you can carry on a conversation you started in the virtual world out in the mobile world through your avatar... like sending text messages through your avatar without exposing your identity."

Vodafone is also mulling how its content could work out for digital customers, having deals with the Champions league and F1. "We've got a lot of content assets - I'm sure we'd supply content in the virtual world," Erixon said.

However, the mobile operator is being coy about what users can expect from Vodafone Island, saying little about the services that it intends to launch when its new home goes live, but promising something will happen before the end of the calendar year.

However, Vodafone will say the island won't be a sales channel or necessarily another customer service platform. "We love feedback but it's not the key objective," Erixon said. That's not to say that's it's not about money entirely, of course - the operator hopes that in time the island will be revenue-generating.

According to Joseph Laszlo, senior analyst at JupiterResearch, while Second Life itself remains more a shop window in the US and Europe, corporates could eventually come to convert virtual money into real cash in a more substantial way.

"In South Korea, you see people making real revenue from virtual goods. I think if the population of Second Life keeps growing and companies can find items of real value the revenue possibility is definitely there," he told silicon.com.

Quite what companies like Vodafone et al get out of the whole process at the moment is undecided as yet. The operator insists that it's not about using Second Life as an advertising platform but it's hard to see what else would persuade such major brands to invest time and money in it, save enhancing their brand profile.

Should corporates like Vodafone be joining in what is essentially an enormous social network built on good-natured geekery? Some users are already unhappy about companies encroaching on their turf: one group, the Second Life Liberation Army, already made its ire plain with a virtual demonstration in the Adidas store.

Erixon maintains companies that exist in the offline world should equally be represented in the virtual world.

"From an ethical point of view, there's the question of whether commercial companies and brands should go into that space - but we are part of the physical world," he told silicon.com.

The operator is just the latest in a long line of companies getting involved - Adidas, Nike, Toyota and Reuters have all started operations in Second Life.

Aside from the headlines such activity generates, there are other advantages to getting involved with the virtual world, according to JupiterResearch's Laszlo. "The size of the user base is getting interesting to large businesses right now... and the opportunity to get feedback from a highly intelligent, highly tech-savvy group of people is quite attractive too."

While Second Life is Vodafone's first foray into fake worlds it may not be the last. "I don't think it's rocket science - with MySpace, YouTube, blogging and everything else going on - to work out this is important... I expect there will be more announcements," Erixon said.