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Hot New Market: Online Worlds

Should you take your business to the virtual world?

Virtual worlds--those avatar-driven electronic spaces like Second Life and The Sims--are booming. Companies like Starwood Hotels are spending money to build virtual locations, and Reuters has assigned a journalist to cover Second Life goings-on. Should you be there, too?

Russell Holliman, co-founder of Podcast Ready, a Houston startup projecting 2007 revenue of $5 million, says yes. He has been using Second Life to host seminars about podcasts and his company's software application, which enables portable media players to receive podcasts automatically. "When we have an event, we get quite a bit of traffic, and we expect that to grow as we develop our own location," says Holliman, 35.

"There's a tremendous amount of commerce that takes place [in virtual worlds]," says Steve Rubel, senior vice president of Edelman's Me2Revolution PR practice in New York City ( "If you sell or make something you can refashion and sell in the virtual world, you can do well."

T. Sibley Verbeck, founder of The Electric Sheep Company, which is building virtual-world presences for companies like Starwood and Edelman, says it's a bit early for entrepreneurs to spend big bucks developing their virtual world presence, with some exceptions. "Fashion is vibrant," he says. "If you're a small company that makes T-shirts or other things that can make your avatar look good, it makes sense. If [your] business involves building a community or reaching out to people through events, it's a natural fit."

This story appears in the February 2007 issue of Entrepreneur. Subscribe »