Quick Take: The Virtual Future or Ponzi 2.0?

By Seth Jayson – Jan 25, 2007 at 12:00AM

Is the incredibly popular online universe really just a Ponzi scheme?

Could it be that the much-hyped Second Life is nothing more than a giant Ponzi scheme, predicated on cybersex and virtual gambling? This article makes a pretty interesting case that Second Life is a good old-fashioned Ponzi scheme, which suggests that corporations clamoring to look hip by entering the virtual world have no idea what they're getting involved in. The "Hey, look at us! We play in here, too!" crowd reportedly includes IBM (NYSE:IBM) Nike (NYSE:NKE), Sony (NYSE:SNE), Sun Microsystems (NASDAQ:SUNW), ABN Amro (NYSE:ABN) and others. Could the press, stumbling over itself to be the first to give us a glimpse of the new, new future, be missing the forest for the trees?

Naw, I'm sure they're all too smart for that.

But I do note that on the Second Life home page, there seems to be a lot of emphasis on the promise of building virtual fortunes. How much would you be willing to pay for an island in a world where creating more real estate is as easy as clicking a mouse?

Comments? Bring them here.

At the time of publication, Seth Jayson had no positions in any company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.

About the Author

Seth Jayson (TMFBent) began his Foolish career as a writer before recommending stocks in special products and then taking on the co-advisor role at our small-cap service, Hidden Gems, where he became the longest-serving HG advisor. After that, Seth specialized in beating the market with lesser-known, smaller companies at Market Pass before transitioning into the lead advisor role for Artificial Intelligence and Trend-Spotter. His work at TMF has also included some time building databases and "robots" that wrote thousands of articles on their own, along with other robots that uploaded these articles into our publishing system. Although these were too simple to qualify as AI (except maybe by 1950s terms), he likes to think that keeping a toe in the nitty-gritty of the tech gives him some valuable perspective that can help inform investing decisions. Originally from the frozen Iron Range of northern Minnesota, Seth graduated from Carleton College and holds master's degrees from NYU and the University of Missouri. When he's not riding bikes or hiking with the family, he's probably out running, or making carbon fiber bikes in the garage.

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