Dell Preps For Its Second Life

The PC giant sets to debut in the virtual world Tuesday. Meanwhile, one bad avatar roils the Linden.
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Dell (DELL) - Get Report is expected to become the latest major corporation to establish a presence in Second Life when it holds its own press event in the virtual world on Tuesday.

On Tuesday, Dell Senior Vice President Ro Parra will announce the news at a virtual press conference and explain why the computer maker has created a virtual presence in Second Life, according to GCI Group, a business communications company working with Dell. Linden Lab founder and CEO Philip Rosedale will also be on hand to discuss Dell's introduction.

Dell representatives were not immediately available for comment.

Second Life, the massive multiplayer online world, allows users to log on through the Internet and create 3-D computer-generated identities. These avatars are then free to explore the world that San Francisco-based Linden Lab has synthetically created.

Dell is expected to join companies such as

Reebok

(RBK)

,

Toyota

(TM) - Get Report

,

Starwood Hotels

(HOT)

and

Sun Microsystems

(SUNW) - Get Report

, which have already set up homesteads in the virtual world.

However, recent events underscore the growing pains of Second Life's fast growing economy and how the virtual world can pose problems corporations never dreamed of facing in the real world.

Between Nov. 8, and Nov. 10, the amount of money changing hands between residents surged to more than $1.6 million per day, tripling the average amount.

According to an anonymous email sent to

The Second Life Herald , a resident opened two separate "sim" accounts and wrote a script, or computer command, that passed Linden quickly between both avatars. This created the spike in the total number of U.S. dollars spent in the Second Life system, even as no virtual goods or services were actually exchanged.

"I passed a fixed amount of

Linden back and forth between two accounts via a scripted system that was able to pass the money back and forth repeatedly," the email read. "When I started the test, the 24-hour total was approximately $486,000. After about an hour and half, my system pushed the total to over $1.5 million."

Real world money can be exchanged for Linden, the accepted currency in the Second Life world. Linden can be used to purchase virtual land space to build on, different clothing for avatars, or even adult-related content. Linden can then be exchanged for U.S. dollars and other foreign currencies through SL's own LindeX currency exchange. Currently, $1 will get residents roughly 273 Linden.

Understandably, Linden Lab fielded a bevy of questions regarding the unusual activity in the virtual economy as the data ballooned.

"A single user ran a script to pass a fixed amount of Linden dollars between two

accounts," says John Zdanowski, Linden Lab's chief financial officer. "While it is easy to identify this sort of abuse at this scale, it is a difficult problem to solve systemically. It is a challenge because there are millions of scripted transactions that are valid."

Fortunately, there is no expected effect on the Linden's exchange rate with the dollar. However, there is no way for Linden Lab to monitor the amount of transactions between residents.

In addition, businesses that have yet to make an entrance into Second Life are now unable to rely on data that is completely vulnerable to manipulation by residents. Linden Lab offers economic data and market history on the Second Life Web site, enabling residents and companies alike to monitor changes in the exchange. But a company such as Dell will be unable to make any type of projections for its business based on data that calculates the amount of dollars spent in over the previous day.

Even more problematic is that Linden Lab, which has the ability to exercise control over nearly all other aspects of Second Life, cannot figure a way to pull strings and keep this one specific data point true.

"Probably the only systemic change we could make is to apply a

Linden charge to all automated transactions," says Zdanowski. "This would be a natural limiter to abuse of this sort. That is not something we're currently implementing but I'd be interested in hearing how the community thinks we should approach this issue."

Residents may have a chance to offer suggestions on Thursday when Linden Lab will hold the monthly town hall meeting for November. Rosedale will answer questions and respond to comments when the meeting commences at 1:30 p.m. PST.

Robert Holden is staff reporter Robert Holmes. He reports often from Second Life.