SECOND Life, the 3D virtual world designed and run by its user community, has generated that rare level of mainstream media hype that actually scares business people.

When media attention moves an industry development from being a ‘curiosity’ to a ‘phenomena’, the business community very quickly wants to know what it means.

What is it? Is it a threat? Or is this a good thing? There is nothing like fear, uncertainty and doubt to focus corporate attention.

The Project Factory principal Gary Hayes, who has directed and built Second Life developments for Telstra BigPond and the ABC reckons the virtual world is both threat and opportunity.

Mainly, he says, the fact that Second Life has moved beyond mere curiosity means that businesses need to understand the new environment, and to understand what its potential might be.

As a speaker at the Cebit Australia conference and exhibition at Darling Harbour in Sydney from May 1 to 3, Hayes says wants to provide a Second Life “survival guide” for business people.

The Project Factory last month opened its Australian Second Life development office to coincide with the launch of the Telstra BigPond and ABC islands in Second Life.

The company, which has its origins in online and offline multimedia content development, is one of the most experienced corporate consulting and development firms in the world focusing on Second Life opportunities.

Addressing in the Digital Content stream of the high-powered Cebit Connect conference program, Hayes will outline some of the small steps companies can take now to test the waters of Second Life before making any longer term commitment.

Ominously, Hayes says there are a lot of parallels between the current development state of Second Life, and the beginnings of the browser wars in the nineties.

Second Life is like the Netscape of the metaverse – the virtual world – offering a smarter user interface to an online community with a stronger structure, he said.

If you take the view that Second Life is little more than another user interface to an online world that people other than tech nerds don’t have time for, then the parallel with the browser is complete.

Because when the browser took hold – and web communities formed far, far beyond techies – the corporate stampede to get online began. The e-commerce, e-business, e-government, e-health, e-everything potential of the net quickly unfolded.

Hayes says that is why everyone in the business community has reacted in so quickly to Second Life, because though it is in its embryonic state of development, it is easy to see market opportunities. All the online commercial activity that exists today – real-world business transactions conducted out on the web – can be taken to a new level in 3D communities.

Second Life 5.5 million registered users is small, and its current daily commercial transaction rates of about US$1.7 million is still tiny, but the growth of pace of innovation and development means companies need to understand now how it can relates to their own business in order to take advantage of opportunities later, Hayes said.

“Back in the nineties, when the web first appeared, everyone in business just piled on to it,” he said. “But it was the companies that really understood how the web could be applied to their core business activities that were the ones that really flew.”

“And the same thing applies here (with Second Life),” he said.

The ‘Survival Kit’ presentation Hayes will make at as part of the Cebit Connect speaker series will take a snapshot of how Second Life presents opportunities now, and what it might look like in the near term future.

Most of all, Hayes says he will talk about the “baby steps” companies can take today to get a much better understanding of what is coming down the pipe, to make the new 3D communities look a lot less intimidating.

And he will review what some companies are already doing online. BigPond’s Second Life presence, which Hayes directed and developed, includes one of the most heavily trafficked areas in the virtual world – the Billabong Bar – and includes a raft of branding and commercial areas.

Computer giant IBM has been one of the more active corporates in Second Life development, and done a lot of experimenting with how the 3D virtual world can be used for real-world business applications.

The company is known to have held senior corporate meetings in-world. IBM has also been a cutting edge innovator. For the Australian Open tennis, the company took a live feed of the HawkEye ball-tracking technology used by television into Second Life to present tournament matches ‘live’ in the virtual world.

The Hawkeye experience was as much proof of concept exercise as branding, but was powerful demonstration of just one area of what might be possible with real-world data feeds.

“It’s the most fascinating roller coaster that I’ve seen in a long while, and we’ve only just started to see the growth that will occur,” Hayes said.

“In a lot of ways this is the logical extension of the chatroom, but it adds a visual element. And to the extent that people make an emotional investment in their avatars and their online presence generally, it adds an emotional element too,” he said.

“One of the things that is interesting is that its skewed the demographics away from a completely male-dominated environment (in current chatrooms) into a more balanced male-female environment.”

Cebit Australia managing director Jackie Taranto said the Cebit Connect keynote series aimed to give business leaders a snapshot of the current state of technology, and the emerging innovations that will present opportunities and challenges.

“Digital content is changing the way people are buying and selling and marketing, and you really need to understand what’s going on in that online world and how that affects your business,” she said.