For the record: Blogs today are widely broadcasting a rumor "from an academic who heard through the PhD grapevine" and passed on by a VC that Google is putting together pieces to create a SL-like virtual world based on Google Earth. You've heard it all back in May. It makes more sense now that another rumor has it that Google is shopping for a ad-to-games serving company. ZDNet blog warns, "I'd be careful not to pay too much attention to a rumor put out by a partner in the VC firm that owns a substantial stake in Second Life — any news of Google creating its own virtual world is sure to drive up acquisition interest in Second Life from the search giant's competitors."
If this is truly the direction Google has taken, it will need to get it some physics and perhaps AI engines. Another acquisition?
Three thoughts on Second Life:
1. If Second Life wants to survive, it needs to open its tech and let people host their own sims (islands), much like they host websites now. Maybe it can package and sell its own "operating system" and charge money for that, and for having the off-grid sims integrated into the world to allow teleports. There's also a need for an external editing tool for 3D objects.
2. Can anyone calculate the dollar value of all Linden currency in circulation? It seems like a perfect business model for Linden Lab -- sell Lindens for dollars at a more or less fixed rate and re-invest the dollar mass. And you can cash out only through the auction-based LindeX (or privately through PayPal), there's no danger of a bank run since the "sell" value of Linden$ will drop nearly to zero as the supply surges.
3. Is Second Life the only place in the US now where you can legally gamble online? Here's what Linden's laywer has to say. (He also says, "Linden Lab does not offer any right of redemption for any sum of money, or any other guarantee of monetary value, for Linden Dollars." That's regarding the previous point).