IT Confidential: Turn On Your Virtual Red Light

Where a trip to a virtual world gets blocked, but the author gets a lesson in Internet business models

John Soat, Contributor

December 1, 2006

3 Min Read

I never been in a virtual world, never roamed around Second Life or hacked my way through World of Warcraft. I like to play video games, but I've never played an online multiuser game. So when I had the chance to interview the co-founder of one of the latest virtual worlds, I jumped at it. I thought I might use the opportunity to take a virtual field trip, perhaps interview a few virtual subjects.

Brian Shuster is the CEO of Utherverse (pronounced other-verse), which launched, a 3-D virtual world, last May. RedLightCenter is what's called a massively multiuser online environment, which means its users assume the forms of 3-D virtual avatars and, as in Second Life, they interact, establish relationships, rent property, even conduct business.

You've probably deduced RedLightCenter's market niche. It's an adults-only virtual world, which is all I can say about it because my company's Internet filter blocked me from visiting the site. So much for my virtual field trip. Just as well.

According to Shuster, RedLightCenter has 200,000 users and is growing at roughly 50% per month. By comparison, Second Life's current population is more than 1.7 million, according to its creator, Linden Labs. Shuster claims RedLightCenter's demographic breakdown is roughly 60-40, males to females, and that it's populated by normal consenting adults, not sex fiends or predators. "One of our shops is rented by an orthodontist in New York," Shuster says, though he doesn't know exactly what the guy plans to do with it.

Shuster sees himself on the cutting edge of Internet technology. "What we're trying to achieve is an integration of Web 2.0 within a 3-D environment," he says. "I'm calling it Web 3.D." Shuster, who's an old hand at online business, considers himself something of a Web pioneer: "I was one of the architects of the first version of the Internet."

That's true--but not everybody's favorite version. Shuster is one of the founding fathers of online pornography. In the 1990s his company, Xpics Publishing, and its myriad subsidiaries contributed to the Internet's explosion of X-rated pictures. Along the way it helped create Internet business models, as well as some of the more notorious practices. In July 2000, Shuster and his partner agreed to settle FTC charges of credit-card fraud by refunding money to customers "who were improperly billed," according to an FTC statement. Despite banner ads on Yahoo and other sites soliciting defrauded consumers, Shuster says no one claimed the refunds.

Along the way, Shuster got patents for some of those practices, including such favorites as pop-ups and pop-unders. Now Shuster heads a company called Ideaflood that licenses that intellectual property, the revenue from which helped fund Utherverse, he says. One of those patents is for creating subdomains, and it has aroused the ire of the anti-Internet-patent community, which questions its validity on the grounds of obviousness. "We were the first people to use that technology," says Shuster. "We used it to create a wildly successful free Web hosting business."

When I tried to access Ideaflood's Web site, I was blocked again, because my Web browser was automatically redirected to--guess what--RedLightCenter. Why do I get the feeling that's an Internet business process Shuster holds the patent to?

There are 8 million stories in the virtual Naked City. And probably as many industry tips. Send at least one to [email protected], or phone 516-562-5326.

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