v-Business model in virtual world: Second Life case study

Abstract: Virtual worlds are online communities in which individuals are able to interact with each other in real time. Growing rapidly since 1996, the population of these virtual worlds has become several millions. The advent and prosperity of virtual worlds reveal challenges worth exploring on business, society, politics, communication, education, technology, ethics, etc. The focus of this study is one of those issues—business.This thesis is devoted to the study of the developing virtual business (v-Business) in the fast-growing virtual worlds; more precisely, its business model, which is essential for companies to survive. It explores two questions: First, what are the business model components that constitute a v-Business model? Second, what are the relationships among the business model components? In order to allow more depth of understanding of the properties and characteristics of virtual business models, the study concentrates on a single virtual world which is Second Life, as the context of v-Business investigations. Our study bases itself on the information recollected using online interviews and observations. Various existing theories on business models and virtual communities were also used. Consequently, a v-Business model is composed of five business model components which are market, value proposition, activities, resources, and revenue model. For the relationships among these components, revenue model component affects all the components as a whole; resources component builds activities component; activities component delivers value proposition component and value proposition component provides benefits to customers.