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A Virtual World Targets Teens

In the beginning there was a nightclub. On May 15 a San Francisco startup, Doppelganger, is launching the PCD Music Lounge, a spot where teenagers can dance, hang out, and look cool. But the club exists only online.

Users enter this three-dimensional virtual world as avatars, customized characters meant to represent their real-world counterparts. They bounce and bop in a space inspired by the pink-lit megaclubs of Miami and Manhattan. Integrated with their AOL (TWX) instant-messenger accounts, they can talk with friends and pick up new ones. The dancing avatars can signal what they're feeling with gestures ranging from head-scratching confusion to friendly waves. They make everyday emoticons look as dated as a leisure suit.

Paid-subscription-based virtual worlds like Second Life (see BW Online, 5/1/06, "My Virtual Life") have garnered attention for the way they have spawned virtual economies and racy elements that, while successful, aren't really suitable for teens. Doppelganger envisions itself as the foundation of a safe and profitable virtual world. It's not alone. Second Life's creator, San Francisco's Linden Lab, has also developed a subscription-based teen version.

But Doppelganger thinks teens will relate more to its platform. Gartner analyst Mike McGuire says that unlike in previous avatar programs "you're not creating a virtual world, you're participating in one."

CEO Andrew Littlefield says: "We wanted to create something that was more relevant and more current." Inspired by Japanese animation, it's a virtual world that he says doesn't have "a whiff of computer science."

MUSIC MOVER. Doppelganger also has a business plan that it thinks will protect teens from inappropriate material like naughty chat or too-racy avatars, while keeping money flowing into company coffers rather than between users, as on Second Life. Instead of charging for a monthly subscription, Doppelganger allows free entry, but users will have ample chance to buy virtual clothing and other goods to customize their online life. They'll also encounter plenty of advertising from real-world marketers. By keeping the site rated PG, Littlefield figures to avoid the risk of scaring off advertisers.

Games using customizable avatars have been around for some time. Like many of its predecessors, the PCD lounge incorporates some mind-bending links to our own world. For example, at night a real-world DJ spins the set that gets the avatars shaking.

When each song starts thumping, the title appears and users can buy it as a music file or a CD. At listening booths, avatars can hear more music, also for sale. If a club guest is making a fellow party animal uncomfortable, he or she can complain to a "bouncer."

Doppelganger as yet has only made public one advertiser, Vivendi Universal's (V) Interscope Records. The label plans to use the virtual venue to market The Pussycat Dolls, a girl group whose members wear only a little more clothing than they did as a Las Vegas burlesque act. Doppelganger aims for that elusive sweet spot where the scene is racy and cool enough to be interesting, yet where parents can feel their kids are in a safe place.

REAL CAPITAL. As in real-world night spots, members of the group might pop into the club unexpectedly and surprise their fans, says Courtney Holt, Interscope's head of new media and strategic marketing. If the effort proves a success, Interscope could bring some of its other artists, such as Gwen Stefani or the Black Eyed Peas, into the mix.

Doppelganger has so far proven popular with venture capitalists, having last year raised $11 million from investors including Draper Fisher Jurvetson, which in the past has picked such startups as Skype, the online calling service now owned by eBay (EBAY), and Hotmail, the Web e-mail giant now a unit of Microsoft (MSFT). Andreas Stavropoulos, a DFJ managing director and Doppelganger board member, says the site has the potential to make "relationships in the real world spill over to take on meaning or substance in the virtual world as well." Other investors include Trident Capital.

Doppelganger's future hinges on how it builds a world branching out from the club. There's already a Times Square-like plaza outside, featuring billboards of Interscope artists. Littlefield says future expansions could include art galleries, cafes, and -- catering to every teen's fantasy of living away from home -- personal apartments, which can be decorated with purchased furniture in a sort of 3-D version of a MySpace (NWS) profile.

CHAT'S NEW CLOTHES? As the virtual world expands, so will marketing opportunities. Littlefield says Doppelganger is offering packages priced between $25,000 and $3 million depending on whether an advertiser wants a "storefront" or "a complete world around your brand."

The possibilities are numerous. Pitching a soft drink? Maybe host an event where the avatars can "drink" it. Teen-friendly clothing retailers could sell virtual versions of the cool duds of the week. Video games, movies, and TV shows could all get their own tie-ins.

Although he had not seen the Doppelganger platform, Jupiter Research analyst David Card is more skeptical: "Maybe it's cool and would blow me away," but he adds that avatars tend to create just a "less efficient way to manage a chat room."

Littlefield agrees that in the past avatars were often awkward. With Doppelganger he says the technology is such that seeing the "spatial relationship" between the figures actually helps chats involving more than two people.

VIRTUAL COLD SHOULDER. The lounge opened its doors for previews to selected Pussycat Dolls fans and their friends a few weeks ago. It was relatively empty, but during my brief foray into the club, it was possible to get at least some feel for the place.

The experience validated some of Card's concerns. Though I decked out my avatar ("Halpsatar!") in some cool jeans and a T-shirt, I found it difficult to make connections. Other avatars chatted, but they didn't respond to my greetings or responded long after I had walked away. Even the bartender ignored me.

I couldn't strike up any conversations, but it was fun to explore the club. Sometimes it was genuinely spooky. In one sideroom a woman sat alone on a couch, absorbed in her own thoughts. All the dancing must have worn her out.

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