METANOMICS WITH ROCKETON - JULY 14, 2008

ROBERT BLOOMFIELD: Good afternoon and welcome to a very special episode of

Metanomics. As always, we have a live audience in Second Life, but this time we’re also

going to take you on a tour of a new Virtual World still in Closed Alpha: RocketOn. And our

tour guides will be the company’s founders, CEO Steve Hoffman and VP Eric Hayashi. So

we’ll be able to get into the substance of their business strategy and some policy issues as

well as just getting a tour of this new Virtual World, which lays right on your browser and lets

you go just about wherever you want.

Metanomics is brought to you by Simuality, our primary sponsor, based in Evanston, Illinois.

We also have four supporting sponsors: Language Lab, Intersection Unlimited, my own

institution the Johnson Graduate School of Management at Cornell University, and Kelly

Services. As usual our live venue in Second Life is the Muse Isle Arena, and we also

welcome everyone who’s at our event partners across the grid: Meta Partners Conference

Area, Rockliffe University, the Outreach Amphitheater of the New Media Consortium

Educational Community Sims and Colonia Nova Amphitheater.

If this is your introduction to Metanomics, we’d like to encourage you to join our Metanomics

Group in Second Life and also pick up a Metanomics kiosk. Those are both excellent ways

to keep up with our show, which I’d call “weekly,” except that it seems like we have more

than one show a week. In fact we had two shows; this is our second show of the day. Our

first, including also Philip Rosedale. If you missed that show this morning, it was before a lot

of you wake up, you’ll be able to see it on metanomics.net in just a day or so.

Just like we do every week, we’re using Intersection Unlimited’s ChatBridge system to

transmit local chat to our website and website chat into our event partners. Do keep in mind

that wherever you’re watching the show, your local chat is public and will be seen at all

event partner locations and on the web. Please do speak up though because that’s how we

know you’re out there, and that’s how you guys all meet one another.

Before we move on to RocketOn, we’re going to take a few minutes to put someone On The

Spot. Today that someone happens to be David Levine of IBM, the lovely avatar Zha Ewry

in Second Life. We had Zha on Metanomics as our main guest last season, and I think it

was the fastest hour of my life. There simply was not enough time to get through half of the

material that we wanted to cover. So, Zha, it’s great to have you on Metanomics again.

DAVID LEVINE: Hello. I’m required, so I’ll do this right away before I forget, to give you the

standard disclaimer. I work for IBM. I don’t set corporate policy, and, in particular, although

we’re working closely with Linden Lab, I don’t speak for Linden Lab, and I certainly don’t set

Linden Lab’s policy. So with that out of the way, let’s go ahead.

ROBERT BLOOMFIELD: Okay. Yeah, that’s great. Now I can ask you anything, and you

can be outrageous. So, Zha, you’ve been quite a topic in the Second Life blogosphere lately

because of the recent announcement that you teleported from servers that were controlled

by Linden Lab, Second Life as we know it, to OpenSim servers that have been reverse

engineered to mimic the functionality of Second Life’s servers. So other than making you the

Neil Armstrong of the Metaverse, why is this development important?

DAVID LEVINE: Well, I actually should start with two quick clarifications. “Reverse

engineered” is probably deeply disingenuous or wrong, and it’s an independently developed

thing which has worked closely sometimes with Linden Lab, sometimes separately from

Linden Lab, to duplicate the function of a large portion of what Second Life does. The

OpenSim project, I think, would find it somewhat offensive if you had it described as merely

reverse engineering. There’s a lot of very creative original programming there. And second

of all, it’s not the main grid, in case anyone’s wondering. What we demonstrated as a proof

of concept was teleporting between a test grid that Linden Lab has set up specifically for this

purpose and a small number of servers that IBM is hosting on OpenSim, which is based in

the OpenSim software in order to demonstrate this.

As to why it’s important, it’s one of several steps I think we’re going to see over the next

several years to get Virtual Worlds away from being something of oddities, enclosed

gardens and into a much broader part of the interweb where we’re going to see content

creators have a bigger audience. We’re going to see a lot of innovation that happens in

parallel within Second Life and immediately surrounding Second Life and also as a way to

get corporations and educational institutions and governmental institutions opportunities to

build their deployments in ways which are separate from but coupled to parts of Second

Life’s grid. I think all of those developments are very exciting and very important.

ROBERT BLOOMFIELD: Now one of the things that I’ve heard, people who represent

enterprises say, is, “Well, we can’t really use Second Life because everything we do there is

on Second Life’s server. They or others can listen in. We don’t have the security that our

lawyers require us to have, and maybe even that our local law requires us to have in order

to keep our communications secure.” So when you say these are on IBM servers, you would

then have that type of security after you’ve taken that teleport into the [CROSSTALK]

DAVID LEVINE: Right. And this is an ongoing process. At the moment, we’re nowhere near

where that teleport gives you anything like a complete connection to something that feels

like or looks like Second Life or has the same functionality, though it’s certainly converging

on that. But the interesting point is, once you’ve taken that teleport, you’re hosted on a box

which can be placed behind a firewall, can be managed by your IT personnel and can, in

particular, handle things like your data retention and security policy. Now there are a ton of

related security privacy and policy issues that come up as soon as you do that. And so, for

example, you’ll notice if you’ve seen the video that Torley pulled of the demo work, that

everybody shows up as default avatars, not wearing clothing, not looking like their typical

Second Life self. That’s because, in fact, in the proof of concept work, we didn’t even

pretend that we were going to tackle those problems. We’re just tackling login and teleport.

Moving assets, handling permissions, setting policy and determining exactly how we’re

going to eventually grow out a grid of connected--and I hate the word “Virtual World”--the

connected regions and hosting and so on is going to be an ongoing process. This is not

suddenly you throw a switch, and instantly you can teleport and bring all of your clothing and

avatar assets with you.

ROBERT BLOOMFIELD: About how far do you think we are realistically from--assuming

the policies can be nailed down, just from the technical perspective, what’s the timeline?

DAVID LEVINE: There isn’t a precise timeline. We are very much approaching--this is an

engineering exercise, which means we’re building and testing and exploring what the

impediments are to the approach, what the challenges are in the approach. I would guess,

as an engineer, and this is speaking strictly from the technical side, the programming part of

this is the easiest part. The hardest part is policy and, somewhat to an extent, socialization,

to make sure that we have the right structures in place to protect content and protect the

creative right for the people who built content. That’s absolutely fundamental to making this

work. One of the things that I personally believe is part of the secret sauce that makes

Second Life compelling is the rich content creation and the fact that people are rewarded for

that. And so making that right is fundamental to this.

Also although teleport looks easy, it’s actually, in fact, and sometimes the trivial part of this,

because that’s merely getting your presence across the wire. Fetching assets, managing

assets and so on require substantial care and attention that hasn’t been done in terms of

engineering. We did teleport first because of engineering consideration. You can’t pursue

some of the other pieces without that.

ROBERT BLOOMFIELD: Okay. Let’s see. I’d like to follow up, I think, with the policy issues

that you referred to. There’s been a lot of talk about intellectual property rights, and, in

particular, I had three different people today express concern about a very specific thing that

this type of transport would make possible. And that is that someone could take an item out

of Second Life and onto another grid that doesn’t have copy protection built in. They could

open that item up, modify it, repackage it, do whatever they want, bring it back in to Second

Life as an illegitimate copy. So what are your thoughts on how to address this problem?

DAVID LEVINE: Okay. Let’s start with two specific issues there, one of which is making the

connection and all that and how that’s exactly going to end up being policy and decision set

by the grid hosters. In the case of Second Life, obviously Linden Lab. Just because the

OpenSim software does or doesn’t permit certain things to be built, and, in fact, OpenSim

software could be configured a number of different ways, doesn’t mean that anyone who

has an OpenSim after we do some interoperability work will suddenly have direct access to

Linden Lab’s asset server. Just as a technical matter, that asset server lives behind a

firewall, and you’d actually have to have a defined agreement with Linden Lab to get them to

give you access to their asset. It’s not as if suddenly having this protocol worked out and

even tested would just magically make those security issues, which were put in place for

exactly this reason, go away.

Secondly, there’s nothing inherent in what the interop work is doing that makes it easier or

harder to engage in theft of content or, if you prefer, infringement of copyright than you can

do with the client today. The end constraints on those are always legal. The technical reality

is that the client today let’s people who wish to engage in unscrupulous behavior do certain

things because of the fact that the moment a texture is presented to 25 clients, it’s sitting

physically in the graphics memory of those 25 clients, and people can do things. That’s a

fundamental hard fact of life that we all sort of look at reluctantly and say, “There’s not a lot

we can do about it.” If I want you to see my shirt, then that texture is going to be visible on

your client. Nothing we’re doing changes that, and, in particular, the protections which exist

today which are fundamentally that there’s a legal constraint against your copying that aren’t

going to change. And, again, I can’t speak for Linden Lab’s policies.

The technical underpinnings will allow us to express those policies, mark content with

people’s intent and I would assume that rational, sane grid providers are going to sign

agreements with each other that let them protect their legal rights. It would be odd, I would

think at best, and foolhardy is another word that comes to mind to set those sorts of things

up in ways that don’t protect your legal rights. That includes, for example obviously, content

that Linden Lab has had licensed under the current terms of service isn’t explicitly marked,

isn’t necessarily takable off the grid. In which case, that defines the constraint that, in terms

of deploying a service, you may have to live with.

ROBERT BLOOMFIELD: Okay. Thank you very much. I’m afraid we’re basically out of

time, but I definitely want to have a more extended discussion of these topics and also not

just with you but with some people who can speak for Linden Lab. So I hope to pull that

together over the summer, and I do hope you’ll be able to join us for that.

DAVID LEVINE: Oh, I’d certainly be interested in doing that. Also, for anyone who’s

interested in this, we do meet in-world. I’m always interested in discussion in-world anyone

who wants to grab me offer friend or offer IM feel free to do so after this, and we can set that

up. This is very much an open process. I don’t want anyone to feel as if they’re input isn’t

value to this.

ROBERT BLOOMFIELD: Okay. Zha Ewry, David Levine, IBM, thank you very much for

taking your moments in the spotlight On The Spot.

Okay. Let’s move on now to the main event of the day, which is that we’re going to take a

look at RocketOn, and we have two tour guides with us. Let’s welcome to Metanomics

Steve Hoffman and Eric Hayashi. Steve, let’s start with you. Welcome to Metanomics.

STEVE HOFFMAN: Thanks for having us.

ROBERT BLOOMFIELD: And, Eric, you as well. Let’s just make sure we can hear you say

hello.

ERIC HAYASHI: Hi there, Robert. Thank you for having us.

ROBERT BLOOMFIELD: So now you guys founded RocketOn together, and you both

come from basically game development background. Is that right?

STEVE HOFFMAN: That is right. So I can tell you a little about mine, and I’m sure Eric can

tell you about his. I’ve been in games for years now. I started off at Sega when it was in its

prime, when the Genesis was out, and worked out of their Tokyo office. And then I formed

my own game company called LavaMind and made a number of different games. And after

that, I continued in games and interactive television with a company called Spider Dance

that I founded. And then Eric and I hooked up when we were at InfoSpace doing mobile

games together. And, Eric, you want to--

ERIC HAYASHI: Sure. I had also started in the game space as a programmer and spent

some time then working in product development and in management a companies like

Virgin Interactive and also spent a good amount of time as Hasbro Interactive, in their

casual games group, where I ran a number of teams focused on creating casual games

back in the mid to late ’90s, and moved then to manage a couple studios out of Boston for

Vivendi Universal and did some time in mobile games development as well. And like Steve

said, we met at InfoSpace.

ROBERT BLOOMFIELD: Well, the gaming tradition does definitely come through

Rocketon. I’ve actually spent quite a bit of time playing around with this new site. Before we

go further, I also want to bring one more person into the conversation, and that is our SLCN

camerawoman, Texas Timtam. Texas, can you say hello?

TEXAS TIMTAM: Hello, everyone. I don’t get a chance to talk very much on these shows,

but, welcome.

ROBERT BLOOMFIELD: Yeah, that’s right. This is your moment in the sun. You want to do

the “Hi, Mom,” thing or anything?

TEXAS TIMTAM: Hi, Mom.

ROBERT BLOOMFIELD: So are we getting Rocketon on the screen now?

TEXAS TIMTAM: We will in about one second, and there we are on the Rocketon home

page.

ROBERT BLOOMFIELD: Okay. Wonderful. So first I do want to clarify for the people who

are watching this show that Rocketon is in Closed Alpha. So if you just go to rocketon.com,

you actually can’t do much yet. Actually, Eric, what’s your schedule for deploying into Beta?

ERIC HAYASHI: So we feel that we’re very far along and that we’re pretty close. I’d say

within the next couple of months we’ll be, hopefully, turning it on for the general public and

moving to open it up a little bit more than it is right now.

STEVE HOFFMAN: I’ll chime in there. This is Steve, and what we could do for your users

is, we could let them into our Alpha so that they can test it out and see for themselves.

ROBERT BLOOMFIELD: Well, that would be wonderful. At the end of the show, you can

pass along the information to us, and we will get that to our community. I really appreciate

that.

STEVE HOFFMAN: Sure.

ROBERT BLOOMFIELD: Okay. So let’s see now. Texas, hopefully, you’re looking at me

because I want to say hello to some people so I’m going to wave. Here I am. I’m Beyers.

Okay? I’m not very original with my names. And now you can see, and, Texas, just tell me if

people can’t see this on the screen. But you can see Kahuna to one side of me. Kahuna’s

got, I guess, a giant ‘fro. Now he’s got his guitar. I feel better now. Oh, see now I’m nervous

because you have a war hammer or a two-headed axe or something, and it looks like you’re

drinking wine. So this is going to be an interesting tour. I’m glad I planned ahead. I sort of

map-quested what we have. And then Steve has used his silly emote, and he’s got a

weedwacker. So one of my first questions here is sort of: What’s the value proposition for

the consumer? So I’m a user. I’m going to get into this World. What are the things that are

going to attract me and keep me? Steve, you want to take that?

STEVE HOFFMAN: Sure. The biggest value proposition is that we’re sort of opening up the

idea of a walled garden Virtual World to the entire internet. So as whereas with most Virtual

Worlds, you’re either on a website and you play within that website like for Gaia and Club

Penguin or you’re inside an application like with Second Life, we allow you to take you

avatar and walk around the web and meet friends and other people on virtually any website.

ROBERT BLOOMFIELD: And we can play games as well?

STEVE HOFFMAN: Yes. We’ve actually taken the time to--and that’s what we’re in the

process of doing right now is building out Virtual Spaces on top of sites. So if you go to your

favorite band site, you may see a music game. If you got to your favorite celebrity gossip

site, you might see a celebrity gossip game that you can participate in. If you go to a fashion

site, you can dress up your avatar and find new clothes. And so on and so forth.

ROBERT BLOOMFIELD: So now, on Rocketon, I guess you’re into games of chance

involving gnomes. I am going to challenge Texas here to a game of gnome toss, and I’m not

going to bet. I’m given a screen here that says I can bet some amount of rocket points. I’ll

want to talk about those in a moment, but for now I’ll just point out that we’re not allowed to

gamble in Second Life, and I’ve got my avatar in Second Life, so I’m not sure what I’m

allowed to do in Rocketon while I’m also in Second Life. So I’m going to do this for free.

We’re not actually going to pay any money. No betting now. And let’s see, Texas, hopefully,

you can see on your screen that little invitation to play gnome toss? And there we are. Let’s

see. You’ve got to choose, I believe, heads or tails. And there it goes. Oh, ho! I lost. Okay.

So Texas can send me to whatever website she wants to now.

Actually let’s talk just a little about these rocket points. I could have bet on those. Actually

when I started in this Alpha, I was endowed with some points. What’s the role of those?

That’s a Virtual Currency?

STEVE HOFFMAN: Eric, you want to dive in on this one?

ERIC HAYASHI: Sure. Yeah, that’s right. There are rocket points within the system, and

that’s a form of Virtual Currency. And we allow users to bet with those between themselves,

and we also give the users other ways of earning rocket points within the system just by

virtue by using the system. With rocket points, as you accumulate points, you can use those

points to purchase other items to create unique identity, bet points with other players. It

gives you a lot of in-world clout.

ROBERT BLOOMFIELD: And you also have rocket dollars?

ERIC HAYASHI: That’s right. So we have another currency that’s rocket dollars. They’re

never intermingled with rocket points. And, with rocket dollars, we have an online payment

gateway where people can purchase rocket dollars, and there are certain items within the

system that are only available for rocket dollars. So if you really want to create a cool

identity, you want to get something really unique, pay some rocket dollars and do that.

ROBERT BLOOMFIELD: Okay. And now is there an open exchange rate? Can I sell my

rocket dollars for cash?

ERIC HAYASHI: There is no exchange, so unlike some of the other Sims out there we’re

keeping our currencies completely separate.

ROBERT BLOOMFIELD: Okay. Now you talked about putting content on top of websites.

What I’d like to do is go to another website and, Texas, if you’ll follow us up to the top left

corner here of the screen, there’s a little blue hole. So let’s see. Texas, tell me when you’ve

got me near this little hole.

TEXAS TIMTAM: I’ve got you now.

ROBERT BLOOMFIELD: Yeah. I see Steve and Kahuna are over there. Now who’s pets? I

see Rover and Meow, a little cat. Steve, are those your pets?

STEVE HOFFMAN: Those are my pets? I have a pet dog, Rover, right here. And Meow is

my cat. And I can see them. They listen to my chat. If they detect I’m happy, they’re happy.

If I’m sad, they walk away with their tail between their legs. They’re pretty smart pets. They

learn all sorts of tricks. I can have them do tricks. Do you want to see my dog do a flip?

There he goes. Boom! On my cat.

ROBERT BLOOMFIELD: Okay. So now I’m going to click on this wormhole over on the left

here. When I click on that, it opens up, and it looks like something kind of out of Star Trek.

And when I click that, a dialogue box comes up. It says, “This is a Rocket. I’m a wormhole.

Click, and it’ll take us to cocacola.com.” One of their websites. So I’m going to go ahead and

do that and ask the rest of you to follow along. Okay. And so I’m now loading that site, and

let’s see. Okay. Here I am, and let’s let Texas catch up with us, our camera crew. We can’t

do anything exciting until the camera crew is here with us. Now, Texas, when I went through

I noticed that my Rocketon actually turned off. I had to turn it back on so you might--ah,

there we go. So I see Texas is there now. So you can see right in this corner here is a little

Coke vending machine or quasi-Coke. When I look at that logo, it doesn’t look identical. I’m

going to click on that, and it gives me a Coke can, and I’m going to go ahead and see what I

can do with that. So let’s see. I just have to find my stuff, and I’ve got a toy. All right. I think

that’s a toy, isn’t it?

STEVE HOFFMAN: We call it a toy.

ROBERT BLOOMFIELD: Yeah. And there it is. So let’s see. Oh, yeah, there’s one: a little

Coke toss there. And I’ve got my own here. Let’s see what that does. Okay? So fun. You

guys definitely had some fun with this. What exactly is your association with Coke in

creating this site and creating this content on top of the site?

STEVE HOFFMAN: So basically we have the power to layer any sort of Virtual Object or

spaces over any website on the entire internet. So, with Coke, we simply put up our own

vending machine, and you can see it’s not exactly a Coke can because we didn’t want to

infringe on the trademarks, but we put our own version of a soda can up there, and people

can come there and start picking up sodas, and then they can use them wherever they go

on the web. And the same thing applies to any website. We’re putting stuff up now, like if

you take us to blackflag.com, the pest control company, you’ll see what we have there. A

surprise.

ROBERT BLOOMFIELD: I can guess.

STEVE HOFFMAN: Yeah. And we have actually a roach motel there where you can collect

roaches. And if you go to other sites, we are going to be layering on top of them content that

relates to that site.

ROBERT BLOOMFIELD: So just so I’m totally clear on this: You can do this without any

permission from Coca Cola.

STEVE HOFFMAN: Yes, as long as we don’t infringe on their trademarks.

ROBERT BLOOMFIELD: And that’s because this is a plug-in that just puts basically a layer

over my browser and just has content that is tied to the website through the browser you

know that I’m at.

STEVE HOFFMAN: Exactly. So as a user, you’re installing on your computer the ability to

layer this Virtual World over that site. So that’s your choice, and the website has no say in

what you do.

ROBERT BLOOMFIELD: Okay. I mean, in a sense, that means you don’t need anything

from a company like Coca Cola, but you might want something from them. So I’m wondering

what types of revenue models you have in mind that would provide win-win situations where

Coca Cola is happy to, in fact they encourage you and pay you to put content on the layer

over their site.

STEVE HOFFMAN: We have two things that brands can do with us. One is it can actually

put out virtual goods on their site, and users will pick up those virtual goods when they come

to the website. For example, if we did a deal with thegap.com, they could put virtual clothing

all over their site, different outfits. And if you go to thegap.com, as you go through their

online store, you could pick up virtual copies of each of their different outfits for your avatar.

Then when you go back out--first of all, that drove traffic to thegap.com, and it had the user

go through all the different pages of thegap.com to collect different items. Then the

secondary effect of that is, once a person dresses up in those outfits and goes back out

onto other sites, other users will ask them where they got them. And that will in turn drive

more traffic to the website. So that is our primary model.

In addition to that, we are allowing brands, and especially entertainment companies, to not

only put up outfits and clothing and avatars and creatures and toys that people can pick up,

but we’re also allowing them to embed games in virtual spaces on their site. So that when

other users come there, they actually hang out longer for making their site into a smaller

Virtual World, sort of like a Second Life island, but that connects to all the other websites out

there.

ROBERT BLOOMFIELD: Okay. So I guess when I look at what you’ve done with Coke

here, one is, you’ve provided the wormholes that got us here, and the other is that you have

provided content that will be on the site. And now one of the questions we have from our

Second Life audience is: Can users create their own content, either now or in your vision for

the future?

STEVE HOFFMAN: Eric, you want to take this one?

ERIC HAYASHI: Currently users cannot create their own content. We’re trying to manage

that closely and keep that controlled, primarily not because users aren’t creative, but

because we really want to control the quality and the content of the site, at least initially. We

do intend to look at different ways of opening up the system, all of which we haven’t come to

any decisions or conclusions on yet.

ROBERT BLOOMFIELD: Okay. So I have my own website, and I would actually like to take

you guys there. So what I’m going to do is type out here, and let’s see. So I just popped a

door on the screen a little bit below and to the right of Texas Timtam. And my understanding

is that everyone who is on this page, when I put the door down, when they click on that

door, I can basically invite them to join me on a journey to whatever that website is. So I

guess this time I will be polite, and I will let you go through first.

STEVE HOFFMAN: Great. Are you going to go there? I’m going to go.

ROBERT BLOOMFIELD: And let’s see. Yeah. Okay. I see Texas has that on her screen as

well. Texas, go on ahead through. And let’s see. Texas, you see that door? Ah. There we

go.

STEVE HOFFMAN: We’re all here.

ROBERT BLOOMFIELD: Okay. So let’s see. We’re all here, and here we are on the

Metanomics website. Okay? And a little confusing for me because the video is playing. So

actually the sound is playing. You know, the video, I’ve noticed, doesn’t work when I’m

actually in Rocketon. Actually it doesn’t seem like the door treated Steve too well. His avatar

looks a little bit different now.

STEVE HOFFMAN: Oh, it transformed me.

ROBERT BLOOMFIELD: But now I do notice that the functionality of my website

deteriorates with Rocketon on because it blocks the video. Do you know anything about why

Quick Time might behave unusually here and whether that’s something that you had

planned to fix?

STEVE HOFFMAN: Yeah, that’s the reason we’re in Alpha. It’s to work out all the kinks.

The thing is, we basically layer on top of every site, so we have to work with all the different

sites, as well as with all the different browsers, so Firefox and IE6 and IE7 and Mac and PC.

So we are working out the kinks right now for small things like some video types. Now our

experience is most videos work without any problem.

ROBERT BLOOMFIELD: Okay. Well, we’ll have to look into our site then and see what’s

the issue. But just more generally, I’m curious, how would you rate these types of technical

problems in the scheme of web design and interoperability? Have you found this to be much

more challenging than anticipated?

STEVE HOFFMAN: Yes. Building this out has been technically more work than we

expected because we have to make it compatible not just with the different browser types,

but the different browser types and Flash on every site out there. So there are a lot of little

things, like you just pointed out, one of them that we are fixing one by one as we find them.

And we hope to have them, at least 99 percent of them fixed by the time we actually open

the doors.

ROBERT BLOOMFIELD: Okay. So before we go to another site, I’m just disappointed

there’s no content on mine from you guys. So I’ll put a few dancing carrots here just so,

hopefully, that’s showing up all right on the screen. Maybe a little low for Texas, but people

see the carrot tops anyway. So let’s see. Okay. And then we’ve got a little crab there. See

now, if I had gotten hold of you guys earlier, I would have made sure that you built some of

this stuff in, and then we’d be luring a bunch of Rocketon folks to our site. But along those

lines actually, I’ve spent a fair bit of time in Rocketon, interacting not just with the interface

and understanding the technical stuff, but also I’ve been interacting with the other Rocketon

avatars. And it seems like the age skews a little bit younger than Metanomics does. Not

many of the 13- and 14-year-olds I met seemed to be interested in business and policy in

the Metaverse of Virtual Worlds. So I guess I’m wondering: What is your target audience?

And if we bring in a group of people from Metanomics, are they just going to be interacting

with these young kids who have totally different interests? How do you handle these

communities? Maybe, Steve, you can take that.

STEVE HOFFMAN: Sure. Our belief is that we want this to be a broad system so to appeal

to a broad demographic and not a narrow demographic. So there are sites out there, like

Habbo, which specifically target the tween audience. And our approach has been 13 and

up. So initially a lot of our testers, because they have time, tend to be teenagers, but how

we see our system evolving is that people will segment themselves based on the type of

sites they’re interested in. So the Metanomics folks, everybody who is interested in a deeper

level of discourse than most teenagers are willing to talk about, will tend to congregate on

sites like Metanomics and meet other people there that they can chat with and interact with,

whereas, the teens will be hanging out on MySpace, on certain band sites and on YouTube

and other sites where their friends are hanging out.

ROBERT BLOOMFIELD: Okay. So as long as we stick with our boring old business and

Virtual World blogs, we’ll be okay, and we’ll be able to form our own community.

STEVE HOFFMAN: Yeah. I think you’ll filter out all the teenagers by virtue of the content,

and you’ll have people who’ll want to talk about the same things you want to talk about.

ROBERT BLOOMFIELD: Okay. Let’s see. I’m actually trying to give us another door, which

I did, but incorrectly I gather. What do you say we all just go to Google? Now we should just

be able to type right into the top of our browser. We ought to be able to just type

google.com. Let’s all head over there for a minute.

STEVE HOFFMAN: Okay. I typed it into my browser.

ROBERT BLOOMFIELD: Okay. Let’s see. I am there. I see Steve. I see Kahuna. Let’s see.

And there comes Texas. Okay. So this is a place where I’ve actually found that I’m able to

meet a lot of people because everyone goes to Google to do their search, and whatever

they’re searching for they’re still on the same page with me. I’m actually a little surprised

that we’re not seeing any other folks on this site. But, in fact, I mean if we were to all search

for something here, we’d all be seeing different information on our browser. Right?

STEVE HOFFMAN: That is correct. Eric, do you want to explain how we did this?

ERIC HAYASHI: Yeah. If you type in a search term and you’ll see the list of search links

that Google wants to give to you and likewise for everybody else that’s on Google, yet we’ll

still see each other on top of Google, by virtue of the primary domain. That’s the way it’s

currently designed.

STEVE HOFFMAN: And I will chime in. We actually have the ability to break off a specific

domain and allow people to both see the same page. So for instance, if you invited me to

join you, which you can do through your little friend’s console, I would actually come to the

specific page you are viewing at. So if it was a Google page that you had brought up with

specific search terms, I would see that. If it was a YouTube page with a specific video you

were watching, I'd go to exactly that video and watch it with you.

ROBERT BLOOMFIELD: Okay. Yeah, that sounds much closer to that experience where

you get to watch videos together, for example, which you know is a huge benefit of Virtual

Worlds.

STEVE HOFFMAN: [LAUGHS]

ROBERT BLOOMFIELD: No. Serious. Actually being the host of a television show, I know

how important it is to the audience that since you’re not in Second Life you can’t see this or

watching the web, but there’s a lot of backchat. And actually a lot of great questions which I

probably should get to because they’ve been coming in. If you don’t mind, let me go through

a few questions here. We’ve gotten several about Weblins, which is a very similar type of

product, probably attracting largely the same audience. First, do you see them as sort of

your direct head-to-head competitors? And second, how do you deal with that?

STEVE HOFFMAN: Well, we don’t really deal with it, but we’re happy that other people are

playing around and having fun in the space. Weblins is the closest other Virtual World out

there to what we’re doing. So their feature sets a little different than ours, but they do allow

avatars to move from site to site just like we did.

ROBERT BLOOMFIELD: Well, first of all, you were able to get funding relatively recently.

Right? D. E. Shaw gave you five million dollars in, what was that, series two? Do I have

that?

STEVE HOFFMAN: Yeah. [Series three?] We’ve been building this out approaching a year

now, the back end for it and are just about ready to open up our doors. And we did our first

round of funding last August and our second round of funding with D. E. Shaw came in

December.

ROBERT BLOOMFIELD: Okay. Thanks, by the way, to Austin Scanlon for the question

about Weblins. I’d like to follow up. A little bit of a digression. But I’d just like to follow up a

little on the difficulties of raising capital these days. Every time you open the newspaper

these days, it is bad news. What has been your experience in the venture capital market?

Do you see things tightening up?

STEVE HOFFMAN: That’s a good question. I’ve been doing startups for a while. This is my

third venture-funded startup. So I knew a lot of people in the community, especially here in

Silicon Valley, so it was not too difficult for us to raise the funding. But we are seeing a trend

right now where, in general, the financial community is tightening their belts, and the

availability of capital is not as readily available as it was even a year ago. In our particular

case, we’re lucky we got our funding when we did because we have enough to last us for a

couple more years, so we have time to experiment and build out our system. But if you’re a

new company just starting out or you’re a company--I have several friends who are raising

money right now, who sort of are low on funds, then it can be much more difficult.

ROBERT BLOOMFIELD: I appreciate the insight. I’ve got another question here from

Aki Shichiroji: This application tracks what you do and watch. Isn’t this service ripe for data

mining?

STEVE HOFFMAN: It is.

ROBERT BLOOMFIELD: And I guess what he doesn’t say is whether he sees that as a

good thing or a bad thing.

STEVE HOFFMAN: It depends where you sit. What our policy is, is to really protect the

user because, first of all, we feel like if user’s aren’t comfortable using the system, they

won’t use it. So if you look on the internet now, if you’re concerned at all about privacy,

which I personally am, you’ll see that it’s pretty easy to mine data everywhere you go. Like if

you logged into Google and you’re using AdWords, Google has a lot of access with the

cookies, where you are, what you’re viewing, and they know a lot about you. I think the real

important question for companies like ours and for every internet company out there is what

the company does with the data they gather, whether they keep it confidential, what they

track and how they share that data.

ROBERT BLOOMFIELD: Do you have a specific policy?

STEVE HOFFMAN: Yeah, we have actually spelled out our policy very clearly on our

website.

ROBERT BLOOMFIELD: It must have been the thing I didn’t read when I clicked "Okay."

STEVE HOFFMAN: Yeah. But I can synopsize it for you. I won’t bore you with all the legal

text. But basically our policy is around respecting users and not giving away personal

sensitive information of our users to anybody.

ROBERT BLOOMFIELD: And how about opt in, opt out policies? I have implicitly opted in

to any data you want to collect from me simply by signing on. Is that right?

STEVE HOFFMAN: Yeah. Some data we need, like the URL of where you go. We just

need that, otherwise we wouldn’t know what website you’re on and actually be able to send

you to the Virtual World associated with that. So there’s a certain base level of data we need

to gather for the system to function. And then, beyond that, for us it really comes down to if

there’s a partner, let’s say Coca Cola, what are they allowed to know.

ROBERT BLOOMFIELD: Mm-hmm. Now for them to know something, as I understand it,

you have the data. It only appears that there is a relationship--all you really need to put the

appropriate content on, say, the Coca Cola site is--you know the URL the user is on, and

Coke is not directly going to get any of that information. That would have to be through an

agreement with you. Is that right?

STEVE HOFFMAN: That is correct.

ROBERT BLOOMFIELD: Okay. Well, I’m sure there will probably be lots of questions about

the nature of those agreements that you make in the future. But, for now, let me go on to a

few other questions we have from our Metanomics audience members. A couple people,

including Valiant Westland, have asked: How do you keep popular sites from being

completely obscured by the presence of too many RocketOn users?

STEVE HOFFMAN: That is a great question. Eric, do you want to dive in on this?

ERIK HAYASHI: Yeah. Let me chime in on that one. There’s a couple of ways. First is that

we have designed our system in such a way that we create rooms. And so, if for example,

Google became crowded and started to get to the point at which we couldn’t see what’s on

the underlying page, we actually will spawn a new room, and any new users that browse to

Google would go into that room. And so, in that way, we’re able to manage the room

occupancy and, I guess, usability as well. So that’s the primary way in which we’re

managing room traffic.

ROBERT BLOOMFIELD: Just ends up getting pretty confusing. The other thing that I guess

that I thought of, and I think maybe we haven’t quite made clear to our audience is that

RocketOn, this layer above the web page toggles on and off. So right now it’s toggled on,

and, if I try to click somewhere on the web page, even like if I click on my screen, it looks

like I just moved over the text box for Google search, and that’s because right now my

cursor is a little footprint, and it just makes me walk places. If I actually want to interact with

this site, I have to toggle off, and I will disappear. And now I can type in some search terms,

and I believe that, when people see this on the screen, I will be gone, and then I can come

back by toggling back on. So if I’m actually using the site, it’s not blocked by a whole bunch

of people because they all disappear.

STEVE HOFFMAN: That is right. We have two ways actually. We have to toggle on and off,

and what we’re adding which you can’t see in the version you’re using, the Alpha version,

but on our development server, we have the ability to click through to links.

ROBERT BLOOMFIELD: Like hold down a control key or something like that?

STEVE HOFFMAN: We’re experimenting with usability because this is a question for us.

We want to make it as easy to use as possible, so we have the ability where you hold down

a control key and you can click through. We also have the ability where, if you mouse over a

link, the cursor will change from a little foot into an arrow, and you can actually--or a hand

that you can actually click on that link.

ROBERT BLOOMFIELD: Okay. That does seem like a step in the right direction for

usability. I’ve got another policy question here, and this comes from Vicki Silvanski about

gaming regulations that you allow gambling in RocketOn points. Do you see any cause for

concern there from a legal perspective?

STEVE HOFFMAN: No, and I’ll explain why because it’s different than Second Life. What

we don’t allow--we keep a Chinese wall between rocket points and rocket dollars. So

nobody can ever buy rocket points with rocket dollars or sell rocket points for rocket dollars.

Now rocket dollars equate to real currency, and rocket points are more like they’re just

points. They’re just gaming points so they mean nothing. You can buy things with them. You

can buy outfits for your avatars. You can buy objects soon for your personal rooms. And all

sorts of good things. But you can never buy something that would sell for rocket dollars with

rocket points.

ROBERT BLOOMFIELD: Okay. Let’s see. I’ve got two more questions. One is: Couldn’t an

adult take a kid anywhere on the web?

STEVE HOFFMAN: This is something we’ve also addressed. So we have actually

employed a lot of different techniques for security. And the simplest security is that we never

take you to a website without showing you the URL first. We also warn you not to go there

unless you trust the person asking you to go. What we don’t want to do is totally restrict

people from traveling in groups around the internet together because that’s one of the very

unique things and compelling things about this type of Virtual World, which we want to give

people the freedom to do what they want, but we also want to protect, especially children,

who might be using the system. Although it is 13 and up, so we’re not constrained by COPA

laws, we also encourage any parents, who have any concerns about their kid browsing on

the web, to install one of the popular filters, like Net Nanny or Cyber Patrol. And, if you

install those filters, those are a hundred percent compatible with our system. So the person

who took you to the site, the child would be blocked from going there.

ROBERT BLOOMFIELD: Okay. We have time for one more question. This comes from

Valiant Westland again: How confident are you that Coke or any other major intellectual

property or trademark holder won’t decide that naked avatars or various toys or whatever

you put on their site are damaging their brand and take legal action to protect it? And I

guess here, I’d really say the brand more than anything else. So I guess this really is just

putting a point on that question we were discussing earlier. Are you absolutely sure that you

have total rights to put anything on anyone’s website you wanted, even if it were

intentionally derogatory or intentionally damaging to their brand?

STEVE HOFFMAN: Well, let me explain this. We’re not actually putting it on their site. We

are putting it on our Virtual World, which the user is choosing to layer over the site. So if

anybody goes to the Coke site, they won’t see our Virtual World unless they enter through

RocketOn. And that choice is made on the client machine. It’s not out there on the server.

So if each client is choosing that individually--so we don’t see, and we’ve had our lawyers

review this, any case for a brand to have any sort of legal recourse or action against us.

That said, our goal is not to antagonize brands. It’s actually to work with them.

ROBERT BLOOMFIELD: I wasn’t proposing it as a business strategy.

STEVE HOFFMAN: So we will work with brands to make sure, and we have the ability to

do this, that the content that appears on their site is acceptable to them and companies in

general.

ROBERT BLOOMFIELD: Okay. Thank you. I think that we are probably out of time. So

yeah, I guess we do need to wrap up. I appreciate your both coming on the show and letting

us take a tour of RocketOn. It was an excellent time. It looks like the audience finds it

engaging. I personally must say that I’ve been playing around with Lively, Google’s Lively,

as well as RocketOn, over the last week, and I actually have found RocketOn to be stickier

for me, you know, something that I actually pay more attention to. Maybe that’s because I

haven’t gotten the CEO of Google yet to say he’ll come on the show. We’ll see. That’s next.

That’s next on the list. But anyway, Steve, Eric, thank you so much for coming on, and I will

talk with you after the show to figure out how we can get our Metanomics members into

RocketOn so we can hang out on websites we like and play gnome toss.

STEVE HOFFMAN: That sounds great. Thank you.

ERIC HAYASHI: Great. Thanks, Robert.

ROBERT BLOOMFIELD: Thank you. Okay. So that closes out the main event of our show,

and now it is time to end the day with our regular opinion piece at the end, Connecting The

Dots. And my Connecting The Dots today is called I Know What You’ll Do Next Summer.

This week I’ve had lots of people remind me of just how much web technology can intrude

on our privacy. John Jainschigg, of World2World, wrote a blog post entitled Note to Google:

You’re creeping me out! Because, after writing an email on the political philosophies

underlying some Virtual World issues, he received a G-mail advertisement from

Marxist T-Shirts. That followed immediately on the heels of my communication director,

Lynne Cullen(?), telling me that since working with me on Metanomics, she’s now regularly

getting G-mail ads for Harvard Business Review and similar types of offerings.

Just today during the sound checks for the Metanomics special show, Philip Rosedale

confessed that when he was a little kid he would sit up on the roof and use the old antenna

apparatus from the old type of broadcast TV to eavesdrop on people in his neighborhood.

Think about it. So privacy issues aren’t anything new, but Virtual Worlds, I think, impose

upon us an entirely new level of privacy intrusion.

RocketOn, the focus of today’s show, gives us a good sense of why that is. We talked about

that a fair bit. Our primary sponsor, SlippCat, maybe raises even more questions. Because if

you’re surfing the web, you know you’re going to be giving the web host a lot of information.

If you’re using Google tools and cookies, you will be giving them quite a bit of information.

But if you’re in a Virtual World, potentially every avatar and every object around you can

also be collecting information, and, in fact, that is the foundation of the SlippCat technology

that comes from Code 4 software. It’s basically having enabled objects that can--well, let’s

just use the word--spy on you. So it isn’t just Google that may start creeping you out. How

about the people who made that chair in your room in Lively? Or that avatar that’s a

programmed bot tracking your every chat and mouse click. And did I mention, by the way,

that the bot’s avatar is invisible or so small that you can’t even notice it.

And finally, what happens when we bring in the statisticians? Much of my area of business

research, accounting and finance, is all about using statistical models to predict the future.

So give us enough data, and we’ll predict with reasonable accuracy where you’re going to

go next, what you’re going to buy and to twist that horror story tagline, “We’ll know what

you’ll do next summer.”

So what does this mean? I think first it means that there’s going to be a market demand for

people who make defensive tools. I used a product in Second Life called the Mysti Tool that

alerts me every time an avatar moves into chat range. But good tools are never going to be

perfect. So second, there’s a need for some privacy regulations specific to Virtual Worlds.

Terms of Service won’t be enough. As law professor Joshua Fairfield said in one of my first

Metanomics shows last fall, “Contracts between the World developer and the user aren’t

very effective at controlling disputes among residents. We need Real World law that

governs this type of data collection.” And we also need regulations on transparency, opt in

and opt out.

Addressing these privacy questions won’t be easy, but it is going to be essential if

businesses are to feel comfortable having their employees in the Metaverse and if parents

are going to be willing to let Virtual Worlds be the new electronic babysitters for their kids.

And I admit it does leave me thinking maybe television wasn’t so bad after all.

This is Beyers Sellers, Rob Bloomfield, closing out another episode of Metanomics.

Bye bye. See you next week.

Document: cor1023.doc

Transcribed by: http://www.hiredhand.com Second Life Avatar: Transcriptionist Writer