Microsoft Acquiring Second Life Would Kinect Well With Gamers

Microsoft (MSFT) has reportedly put a bid in to buy Linden Lab's Second Life. Neither party will confirm, but it would be a good match: The Microsoft Kinect virtual controller needs an active community and the once-buzzworthy Second Life needs a high-profile boost.

A virtual community with millions of users, Second Life was once considered Web 2.0. The seven-year-old world was the home of presidential stumping (including one-time Illinois Senator Barack Obama) and virtual products from Nike. The virtual real estate went for real money -- and reportedly made real-life millionaires. Things turned sour quickly, however: By 2007, one-time advocate WIRED was calling it an overhyped waste of time for both marketers and consumers.

The record numbers were also inflated, according to WIRED's Frank Rose:

Second Life partisans claim meteoric growth, with the number of "residents," or avatars created, surpassing 7 million in June. There's no question that more and more people are trying Second Life, but that figure turns out to be wildly misleading. For starters, many people make more than one avatar. According to Linden Lab, the company behind Second Life, the number of avatars created by distinct individuals was closer to 4 million. Of those, only about 1 million had logged on in the previous 30 days (the standard measure of Internet traffic), and barely a third of that total had bothered to drop by in the previous week. Most of those who did were from Europe or Asia, leaving a little more than 100,000 Americans per week to be targeted by US marketers.

Things have not improved since the scathing media analysis. In 2008, Linden Labs' Chief Technology Officer Cory Linden was reportedly forced out of the company by CEO Philip Rosedale who, in turn, unexpectedly stepped down shortly after. And just this summer his replacement, Mark Kingdon, left his Second Life leadership position.

According to BNet Media Creature columnist Catherine P. Taylor, Second Life's problem is that "[o]ther social nets, such as Facebook, Twitter and Foursquare, have a degree of interoperability -- people can broadcast their location using Foursquare, for instance, and also have it sent to their Twitter followers. But not so with Second Life. It has always been disconnected from the more mainstream parts of the social net..."

Meanwhile, Microsoft is launching its Kinect motion control next month. It watches the player's motions -- no controller necessary -- and will connect users to Twitter, Facebook, YouTube (GOOG) and other social networks and entertainment.

Despite the innovation, Microsoft can also use some help:

One big area Microsoft can best Sony is in the virtual world arena. Sony's (SNE) PlayStation 3 virtual world, Home, has been struggling to find an identity for the past two years. Is it a social network? Is it a video game hub? It's still unclear. By purchasing Second Life, Microsoft could modify the identity already established by Linden Labs and, via XBox Live and social networks, connect the once-buzzworthy virtual world to the rest of the world wide web.

Photo courtesy of torley // CC 2.0