They'd be CRAZY not to. Watch this video of Second Life's Philip Rosedale demoing his company's (Linden Labs) creation to a band of Google engineers.

Awfully nice of him to come in and give away all the details to Google like that.

I'm sure Google is working on something like Second Life, but WHY? Why not just buy Linden Labs? It's a massive advertising learning opportunity (no pun intended on "massive").

Second Life is a virtual economy that's a simulacra of the internet itself. If Google bought it, they would figure out how to apply their advertising, search, transaction management to the Second Life world - and then systematize it for other MMORPGs and Avatar worlds.

The other thing that strikes me is how impressed Rosedale is with the size of transactions going on in Second Life. Back in March, the biggest earner in Second Life was a "lady in Germany" developing virtual real estate. She was pulling down $175k / year.

Rosedale says that over the previous month 180k distinct objects were bought and sold with a total transaction value of $5M dollars.

Maybe it's just me, but those numbers don't blow me away - there are many AdWords arbitrageurs making $175k per week in the virtual game that is Pay-per-click advertising.

So it strikes me that if Google can't buy the top RPG - World of Warcraft, since Blizzard is on pace to do a billion in revenue, perhaps Second Life is the best acquistion for them in the space.

Update: Second Life experienced a personal data compromise - maybe Google can get a discount if they act fast.

¶ 9/10/2006