Nine out of ten business forays into virtual worlds fail within 18 months but their impact on organisations could be as big as that of the Internet, according to Gartner, Inc. Analysts said that focusing on the technology rather than understanding user requirements is one of the key reasons for failure.

"Businesses have learned some hard lessons," said Steve Prentice, vice president and fellow at Gartner. "They need to realise that virtual worlds mark the transition from web pages to web places and a successful virtual presence starts with people, not physics. Realistic graphics and physical behaviour count for little unless the presence is valued by and engaging to a large audience."

Further reasons for the high failure rate include starting projects for the 'cool' factor or because competitors are doing it. Many were closed down or abandoned by a lack of clear objectives and a limited understanding of the demographics, attitudes and expectations of virtual-world communities. "An effective project starts by focusing on the audience's needs and ultimately delivering the technology to support the community of people," Prentice added.

A benefit of virtual worlds is the rich collaboration experience they offer by adding a real-time visual dimension via avatars, so interactions can include emotional information in the "conversations" between individuals, setting them apart from simpler networking applications. They also differentiate themselves from web-based interactions (which can be asynchronous) by requiring both parties to be present at the same time.

The cost of implementing a corporate virtual platform is also marginal, typically from around $50,000 and trials can start from as little as $5,000, which can further incentivise companies to experiment with them. It could also save costs from reduced use of expensive videoconferencing facilities and eliminate the need to bring employees from multiple locations and time-zones to a single site, with substantial savings in travel and associated costs and time, thereby also supporting corporate environmental initiatives.

As an additional form of communication, virtual worlds have potential. "Companies need to start thinking what their virtual world strategy is, incorporate it into their Internet strategy and merge their two-dimensional web pages to support a '3D web place'. Virtual world presence is not to replace the '2D world' but to supplement it," Prentice said.

By 2012, Gartner estimates that 70 percent of organisations will have established their own private virtual worlds and predicts that these internal worlds will have greater success due to lower expectations, clearer objectives and better constraints.

To conclude, Mr Prentice advises organisations to experiment with virtual world projects on a small, internal scale initially and pace their development to enhance the chances of success and minimise costs.