While the influence of social networking sites such as Facebook and MySpace on firms’ sales and marketing initiatives continues to grow, some experts predict that their impact will soon be dwarfed by that of another Web 2.0 technology - ­ virtual worlds.

Online virtual worlds geared towards entertainment are commonplace nowadays, the
best known being Blizzard’s World of Warcraft, MindArk’s Entropia Universe and Linden Labs Second Life. Users are immersed in an online three-dimensional interactive environment where their characters ­ - usually known as avatars ­ - can get up to just about anything. The fact that life in these virtual worlds often revolves around money, which in some cases can be converted to and from real currency in the physical world, is obviously enticing to businesses.

Ways in which enterprises might use virtual worlds for everyday business range from setting up a virtual meeting place to aid employee collaboration, to a business-to-consumer model where firms maintain a virtual store selling items that are delivered in the real world.

Quocirca principal analyst Fran Howarth is a firm believer in the promise that virtual worlds hold for enterprises. “These worlds have huge potential in terms of the ability to build brand awareness and do PR in the web site’s community and, in some cases, to sell or advertise products to potential customers,” she said.

Topics under discussion at the recent Virtual Worlds 2008 conference in New York reflected the growing interest enterprises are showing in virtual worlds. For example, the theme of one of the best-attended sessions was the need for virtual world developers to focus more on promoting the business benefits of their technology.

Gartner fellow and vice president Steve Prentice believes the past six months have seen a surge in interest from enterprises wishing to explore the potential of
virtual environments.

However, Prentice added that companies are wary of various complications, such as identity management, and reliability and scalability issues that have plagued public virtual worlds such as Second Life. There is also the risk of brand damage if anything should go awry, as well as the ever-present security issues.

One of the major worries is the risk of security flaws that might expose business-critical information. These are not restricted to virtual worlds, of course, but apply to many other publicly accessible social network sites.

“Having employees access a public service such as Second Life, which is out of their control, is not very attractive to enterprises,” Prentice explained.

Quocirca’s Howarth said that enterprises were also worried about the drain on productivity that might be caused by employees spending too much time at work immersed in these sites.

“There is a range of security issues. For example, users placing too much personal information online that could be compromised, or even giving away corporate information, such as email addresses, or chatting about sensitive corporate issues,” Howarth said.

Corporations allowing employees access to these sites “must educate users and put policies in place as to what constitutes acceptable behaviour, as well as ensuring that those policies are enforced through technology, such as content filtering technologies,”she added.

David Lavenda, vice president of marketing for Web 2.0 security specialist WorkLight, said most enterprises are likely to remain wary of virtual worlds for some time to come.

“I think companies have a problem about adopting things that they don’t necessarily buy or deploy or fully control. It’s a cultural change, and it’s been brought on by things like Google Apps, Salesforce.com and SaaS products,” Lavenda said.

However, Web 2.0 advances have a habit of riding roughshod over such pragmatic concerns about issues such as control. To illustrate this point, Lavenda recalled a recent security forum his firm held in London, where a chief finance officer from a large bank commented, “We don’t allow employees to use Facebook at work, but I don’t want to be the guy holding his finger in the dam, because at some point this is going to overtake us. We have to find a way to allow people to use these tools, because they are going to find a way to use it whether we block it or not.”

One of the more prominent announcements at the Virtual Worlds 2008 conference was the partnership between IBM and Linden Labs, creator of Second Life, who demonstrated how some portions of the virtual environment could be hosted behind a firewall on IBM blade servers. This arrangement has the potential to allay some control and security concerns.

Anyone looking to incorporate virtual world technology into their business strategy should tread cautiously, according to Prentice. “I am firmly of the belief that virtual worlds are a great technology for enterprises, but my attitude is that initially they ought to consider it as an internal tool, before they start worrying about opening it up to the external world,” he said.

As an example, IBM plans to pilot its solution internally, allowing its employees to explore the main Second Life environment and cross the firewall into IBM’s custom-built world without having to log on and off.

An alternative, according to Prentice, is for businesses to create their own small-scale virtual worlds, instead of joining a large-scale public one.

“This could be something like Sun’s Project Wonderland, which is a Java-based set of engines and technology to allow you to build what I would describe as an avatar-enabled collaboration environment,” he said, adding that all firms really needed to get started is a few virtual conference rooms and perhaps a presentation theatre.

Enterprises, however, need to install a system that can be relied on, which IBM could offer. “There’s no doubt that IBM can deliver a stable, 24x7 platform, that is scalable and keeps running ­ that’s their bread and butter,” Prentice said.