Virtual Worlds….Really?

by on April 25, 2008 at 12:00 pm

We have a few pieces posting on Tech Ticker today and Monday that parse through a lot of the first quarter venture capital data. I’ve never interviewed that many people in studio at once and not sure how good of a job I did 🙁  (Video on the jump and more on TT)

Anyway- among the biggest surprises to me was how hot virtual worlds were in the first quarter. (and how hard it is to say “virtual worlds”) Wha???

I heard a lot about virtual world companies in Europe and Israel, but
my impression was it wasn’t a US phenomenon any longer. Some bets were
made, Club Penguin did well, Second Life– eh, we’ll see. I just don’t
think virtual worlds are like social networking where everyone will one
day use one in some way. In short, because they’re don’t meld your
online self with your offline self– it makes them more distinct. That
seems so at odds with how the Web is developing to me.

I’m sure there are some niches and some good bets, but $185 million worth in one quarter? Sheesh. Do you want
to lose money, Sand Hill Road? Assuming it has mostly been momentum
chasing the kids space, which is an untapped area of development
online. Still…let’s get our heads back in reality here.