by Erica Driver.

Second Life is an anonymous virtual world — most people cannot identify themselves with avatars that use their real names. I say most people because I suppose there is a chance your name in real life could be Baklava Lacava and you could have picked this combination for your avatar. Oops, no you couldn’t – Rob Koplowitz picked that one a long time ago. Anyway, users in Second Life (called “residents”) choose a first name and a last name from a list of options ranging from realistic to fantastic. For a long time I’ve been thinking that because Second Life is an anonymous world it will be doomed to be no more than experimental grounds for use at work. But yesterday I had a phone interview followed by an in-world tour from Claus Nehmzow, a partner at PA Consulting, a 3,000-person consulting company headquartered in London. My thoughts after talking with Claus:

Anonymity is actually useful in some cases. If you think about it, it is anonymity that helped the Web grow to what it is today. People can search for and consume whatever material they want to in the comfort of their own homes or offices. They don’t have to go to a bookstore or library or retail store and don’t have to interact with other people. You can look at a Web page at the same time other people are, and none of you knows the others are there. This can be useful when, for example, doing confidential research for a client or obtaining healthcare information about sensitive subjects.

Claus Nehmzow gave a great example of the value of an anonymous virtual world environment within his own company. The company held a brainstorming meeting in Second Life in which everyone knew the CEO was there but no one knew which avatar was his, and the CEO didn’t know which of his employees was there or who each avatar represented. Participants felt able to be open about business issues in a way that they ordinarily wouldn’t, and the meeting was extremely productive.

But usually anonymity is problematic. With anonymity and no built-in reputation system, people are not held accountable for their actions. An example of a built-in reputation system is eBay’s – though with eBay’s reputation system it has become very hard for people to be honest and leave negative (or even neutral!) feedback when a transaction experience has been suboptimal. Anonymity can lead to what I call “armored car syndrome.” When we are in the protection of our one-ton hunks of metal we sometimes behave in ways we might not if we were standing on a sidewalk next to the annoying person who’s driving slowly in the fast lane in front of us. The same is true online. Sometimes people communicate and treat each other in ways in the online world that they wouldn’t in person.

But it goes beyond human psychology and social graces. Business leaders legitimately have serious concerns about employees participating in anonymous social environments like virtual worlds. What if a competitor is posing as an employee in an internal meeting? What if an employee engages in industrial espionage or uses the virtual world as a forum for reselling customers’ credit card numbers? What if one employee is found to be harassing another in a virtual world while they are working on a company project, and the company gets sued? For some uses of virtual world technology, there’s no question that an anonymous platform simply will not work. Peoples’ avatars will have to be blatantly tied to their real identities.

Anonymity is on a continuum –- it’s not black and white. An important thing to remember is that we went through something similar with email. Today, we tend to trust that when we email someone who’s given us their email address it is that person who responds. We trust that when we receive an email from firstname.lastname(at), or when we look someone up in LinkedIn or Facebook, we are connecting with who we thought we were. Sure, email spoofing still happens, and phishing and identity theft are huge concerns. (See the November 20, 2006 report “Build Your Privacy Program: Online Interactions.”) But during the next 3 years or so, people will learn to trust avatars in virtual worlds the same way we trust email addresses.

And Second Life, for one, is making moves in the right direction. Second Life has partnered with a company called Aristotle, which provides an identity verification service called Integrity. Second Life is making identity verification a voluntary option for residents. Integrity works by verifying standard issue driver’s licenses or other government-issued ID of citizens of 157 countries. Aristotle claims that more than 50 million consumers have utilized Integrity to verify their identity when transacting with global Fortune 1000 companies, government agencies, and merchants.