Evolution of Business in Virtual Environments

Virtual business as defined in this chapter is any business interaction that takes place in an immersive digital space in which individuals are represented by “avatars” in three-dimensional, user-created environments. While there are hundreds of virtual worlds and hundreds of millions of people globally participating in them, this chapter focuses on Second Life®, owned by Linden Lab. At the time of this writing, eighteen million Second Life® accounts have been registered and participants have spent a billion hours in-world. US $1 billion has changed hands in Second Life® between people in more than 100 countries representing hundreds of cultures. Thousands of universities, companies, institutions and organizations have Second Life® bureaus. This chapter will examine the evolution of some of the most remarkable projects taking place within this virtual world, featuring the passion of early adopters, the role of the media, current examples of virtual work, the evolution of the virtual workforce, the shift in the role of managers toward a collaborative virtual model, the relationship between education and virtual work, and virtual goods and services.