The (Second) Life of Philip Rosedale

We profile the tech-buff who reinvented himself as the benign ruler of the $500m virtual world, Second Life. But with the Feds on its case and growing disillusionment amongst users, can the site survive its first flush?

"In virtual worlds you may be able to fly, but the laws of economic gravity still apply," notes The Economist. In the midst of the real-life financial panic, Second Life, the "much-ballyhooed" online 3D world, experienced its first bank run, with panicked citizens withdrawing so much cash from the local bank that it was forced to cease operations. Still, this probably isn't a long-term crisis for Second Life, in which real financial institutions are still rare and the economy remains dominated by land speculation, porn, gambling and the sale of digital body parts to avatars (as the site's electronic inhabitants are known).

That said, there's no doubt that Second Life is in the grip of some irrational exuberance. Ever since a new audience discovered the site last autumn attracted by tales of people who'd become real-life millionaires there, or simply by the chance of reinventing themselves new users have been signing up at a rate of nearly a million a month. Scores of real-life firms have followed suit; ditto political parties. Last year, the Second Life headquarters of the French Far Right leader, Jean-Marie Le Pen, was attacked with an exploding pig a story closely reported by Second Life's dedicated Reuters' bureau.

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