Interesting article from the LA Times' Alana Semuels, profiling some companies whose virtual outposts in Second Life might be losing their appeal-- if not their viability altogether.

Online retailers in Second Life are finding that users, already spending $6 a month for premium citizenship, just aren't prioritizing shopping to the degree that was anticipated-- making some marketers take a second look at their Second Life investments.

According to the article, other companies, like Best Buy, Sun Microsystems and Dell Island are also finding their virtual outposts going empty, devoid of visitors and staff. American Apparel's virtual store apparently now posts signs that it's closed up shop.

Advertisers have found a variety of problems in Second Life. Firstly, avatars don't have human needs, like food and drink; transportation is accomplished by teleportation and even clothing is optional. According to the article, Ian Schafer, chief executive of online marketing firm Deep Focus, said his recent tour of Second Life turned up empty retail outposts-- and packed casinos, brothels and strip clubs. Schafer said he found in his research that "one of the most frequently purchased items in Second Life is genitalia."

Another problem for some is Second Life's smaller userbase: "You're talking about a much smaller audience than advertisers are used to reaching," said Brian Haven, a Forrester Research analyst, who notes that despite its much-touted userbase of 8 million, only about 30,000 to 40,000 users are logged on even at peak times.

Additionally, many corporations have incurred the backlash of angry residents resentful of traditional storefronts and what they perceived as a prioritization of publicity rather than a genuine interest in virtual life.

With that in mind, the article says, companies like IBM Corp are expanding from Second Life into other virtual environments, like There and Entropia Universe.

Millions of Us, a consulting firm that helps brands enter virtual worlds, previously worked exclusively with Second Life-- and recently announced that it had formed a partnership with teen-targeted Gaia Online, a site popular with teenagers, and CEO Reuben Steiger said that more partnerships are expected in the future.

"It's not about whether Second Life is good or bad," Steiger said. "It's just that there are a lot of alternatives."

[Via LATimes.com]