IBM is set to invest $10 million over the next twelve months to increase its presence in the market for technologies that enable so-called virtual worlds such as Second Life, a 3-D Web environment in which people from various walks doff their everyday identities to assume online alter egos, a company spokesman said Friday.

As part of the effort, IBM will expand its use of Second Life, which now has more than one million users, for virtual meetings with employees and business partners. Next week, company CEO Sam Palmisano will go "in world" to hold a virtual town hall on IBM's Second Life island. The company recently held a similar gathering with the press and analysts, and has hosted a virtual party for IBM alumni inside the online world. It's also building a 3-D replica of China's famed Palace Museum inside Second Life, which will be open to cyber tourists.

IBM's virtual reality ambitions go far beyond Second Life, however, a spokesman says.

"Just as AOL and other early Internet services were early entry ways into the largely undeveloped World Wide Web, Second Life, other virtual worlds, and massive, multi-player game environments are the precursor to a 3-D Internet," says the spokesman. IBM wants to create 3-D business environments that mirror Second Life's interactivity and sense of immersion. The company envisions scenarios under which, say, a team of healthcare researchers from around the world could enter a virtual meeting room to tackle a disease outbreak.

Although it's a virtual world, Second Life is having a big impact on real world commerce and business. News agency Reuters has opened an in-world Second Life news bureau, Amazon.com's product database is available to book merchants operating within Second Life through an open API, and several pop stars have given concerts within the virtual environment. "There are all sorts of new applications for this technology," says IBM's spokesman.