Is there any money left?

During our recent trip to visit my mother in law in California, we spent a few days in San Diego, where the local magazine was running a story about Second Life.

Like many others, I’ve been wondering about the virtual world known as ‘Second Life’ for quite a while, wondering, for example, if I’d ever get round to checking it out.

Unlike many others, what I also wondered is why is Second Life ok when Everquest was not considered cool? I decided to check it out and see if Second Life is really the way forward and so much cooler than fighting snow leopards in Everfrost Peaks and Halas. This post will be the first in a series investigating Second Life and the opportunities it offers.

Personally I liked Everquest a lot, so I had mixed feelings about Second Life from the start: on the one hand that it couldn’t be as good, but on the other hand it held the potential of many of my favourite aspects of Everquest - exploring the virtual world and so on, without having to do any fighting. It’s also free to get a basic membership.

From the San Diego Reader, I discovered that much of it’s popularity comes from the potential for members to create their own content, and also to give away, sell, rent or advertise their creations.

The attractions for designers and programmers are obvious, but some have also been able to make a living out of this.

This capability has drawn in entrepreneurs, and led many bigger companies and organisations to establish a Second Life presence (3).

Apparently Second Life now has some 8.5 million players worldwide, of which the majority are in the US. However, the game has seen a jump in popularity in the UK over the past two years, with several thousand Britons believed to now be regularly trading through the site.
“Some make over $10,000 a month, selling virtual goods. It’s an excellent tool for nurturing entrepreneurial skills as you learn the ‘art of doing business’ without taking major risks.” (1)

In the last year Second Life incomes have become widespread enough that HM Revenue and Customs has begun investigating people who are making real-life profits in Second Life (4). The same tax rules apply to internet trading as to any other form of trading and HMRC has a bot, known as Xenon, which trawls the internet in search of people who use the web to trade but don’t pay taxes. It would be possible for Xenon to track down someone who was making substantial profits through a game such as Second Life.

So is it possible to make money in Second Life? Yes. Is it fun and easy money? Well I just don’t know. So I continued my investigation to find out more about how money works in Second Life (more about this in the next post).

So is Second Life cooler than EverQuest? No. It isn’t a game, but it’s more like the Web: in part a great place for technical development and creativity, in part featuring greater encroachments by big businesses, and in part being infiltrated by get-rich-quick schemes dependent on spammy invasions of privacy.

I wouldn’t be surprised if those things happened in that order, as they did on the web. I would guess there may have been a golden age of Second Life, as there was in the early days of the web, but from now on we will mostly be hearing about whether it is influential, brand-building or profitable.

But these are early days for me, and somewhat coloured by the first ‘popular places’ I visited there (more about these in my next Second Life post). I can also see that Second Life does hold enormous potential, both for expressing creativity, earning money, influencing others, testing various skills in a safe environment and even experiencing things which are not possible in the real world (like flying). So despite some slight initial disillusionment, I’m looking forward to spending more time there.

(1) Virtual reality is serious business

(2) The Second Lives of San Diegans

(3) Virtual Visions

(4) Tax office tackles growing trade in virtual items for real money

(5) Second Life website

(The first couple of months, warts and all)

Click to view all Stairway to Devon posts

Background: I’ve been working on Stairway to Devon, a Devon directory with a focus on promoting arts and environmental concerns alongside general clubs, blogs and business listings.

Summary: Once the website got to the point of being presentable enough, I started gradually making it more available, while continuing to work on the site, and beginning to actively promote it. This is how I did that and what happened.

July 2007
Started leaving it online for search engines to index. Created a Google XML Sitemap to help with this and opened a Google Webmaster Tools account.

End of July - Linked to it from a news item on my company site’s home page, offering free advertising to customers.

Mid August - added links to it from my customers’ websites (after asking them of course!)

25/8 Ordered business cards and postcards from

30/8 Applied for affiliate programmes via TradeDoubler and others.

31/8 Added it to my online portfolio of work

Comments with Hindsight:

With hindsight, much more testing was needed before linking to the site from anywhere. However, the budget (0!) did not allow for hiring someone else to test it. I felt that I had tested it thoroughly myself, without realising the extent to which as the developer I had developed blindspots relating to possible ways the site could be used, my own skills and assumptions, my own knowledge of the site’s functioning, and so on. Some of these issues may have been picked up before launching if I had paid or persuaded an outsider to test the site. (I tried persuading several, and that helped me fix several usability issues and bugs early on, but most people I approached, even with offers of freebies, were so busy that most of them never got round to it, and a few did test something, but with the best will in the world, the time a volunteer can offer is minimal (though still useful and appreciated - these few people’s help found the most basic problems early on!).

Without paying for testing, you are in a difficult situation: your earliest visitors are more like guinea pigs than they may realise, and they are unlikely to tell you if anything went wrong unless they are charged for it. I had to figure out many of the early problems using web statistics, and found the visitor tracking provided by my javascript statistics from Statcounter, were the only clues I had to how people used the site and why certain things were going wrong.

Regarding banners, adsense and monetising the site in general, many people advise filling a directory first and then thinking about how to monetise it (others disagree). My own opinion is that if the site is ready enough and the space is there for advertising (without conflicting with usability), you might as well get some professional looking adverts appearing in it, as this demonstrates the advertising potential to other advertisers that could purchase ad space directly (which is very unlikely before the content and visitor numbers are there). There’s also the possibility of earning something, however small: as an example, in the first few months this site made nothing from affiliate commissions, but a small amount began to appear via Google adsense. Around Christmas, we saw a small amount of TradeDoubler and Amazon Associates commissions. None of this is money you would leave in the street, however, it’s clear that the main income from a directory would come from either selling adspace directly or charging either for listings or for some aspect of the listings (featured listings being a common option). For either of these options to attract buyers, a directory needs to reach a critical mass of pages listed and readers visiting (which the pages bring in via search engines). To keep visitors returning, listings must also be of a reliable enough quality to maintain the directory’s good name.

From my own point of view as a web developer / designer, the site has paid for itself far more in providing a more technically advanced addition to my portfolio, a means to offer free advertising to my customers, and an opportunity to learn, gain experience of running a directory, and keep improving on new skills.

So to summarise the earliest stage: if a web project has any kind of budget to spend on it, earmark a large proportion of it for hiring outsiders to test it. Also, get the basics of the site’s earning potential in place - this can always be adjusted later. Install detailed web statistics, so you can get an idea of how people are using the site. After testing, the most important issue for a directory is to get enough quality listings in, while it’s important with any new site to keep a close eye on the visitor statistics in case common problems are preventing potential customers using your site.

The next installment of this blog will discuss the early steps I took to get listings in, and the first experiences with outsiders using the site.