But recently Second Life is taking a beating.  Check out these recent articles in Time and Wired.  Even though many corporations have rushed in to grab their own virtual real estate, it turns out that not that many people are there to shop.  They are primarily there to gamble and have sex, and this shouldn't be surprising.  Many of the first businesses on the Internet were about gambling and sex.  It's the early-adopter syndrome in a medium that let's you hide your real identity and pretend to be someone else.

To be clear, I am bullish on the 3D-Web long-term.  There is no doubt that as virtual reality becomes more real and accessible to the masses, as opposed to the clunky and odd experience of Second Life today, virtual shopping will take off.  When Internet Explorer and Firefox embed 3D-Web browsers into their 2D-browsers, that may mark the tipping point.  I am also confident that this is going to take many years – at least as counted in "Internet time".  In other words, I'm talking about 3-5 years.

The 3D-Web will provide a more tactile experience than today's Web, and online shopping will blossom.  Our company has shown the potential of a more tactile experience – customer reviews allow peers to "touch and feel" a product sold online, and sales significantly increase with a corresponding reduction in returns (as customers expectations are set by each other, the element of negative surprise is reduced).  Feel free to ask us about our over 20 case studies to learn more.

Until then, I'll be watching Second Life to see how it evolves.  But I don't expect much in the near-term, to be frank.  Once a medium is hyped to the extreme and then has a counterbalancing crash in popularity, it takes years to recover.  I'm not sure that Second Life will get a second life – the word of mouth is already too negative and the community is tainted.  But there will be many 3D-Web efforts to follow…

Update 9/8:
TechCrunch reports that ICANN's CEO, Paul Twomey, keynotes at a conference with the message that virtual worlds are the future of global commerce.  William Gibson, one of my favorite authors and the inventor of the word and concept of "cyberspace", would be proud.

Recently the Wall Street Journal featured an article titled "The Wizards of Buzz". In it the authors cite how Web 2.0 is "turning ordinary people into hidden influencers, shaping what we read, watch, and buy." In today's connected and social media driven world, a twelve year old from Toronto is helping to define what "news" is on Reddit, a news site similar to Digg.

Here's a key excerpt from the article about the impact of these "ordinary people":
"The opinions of these key users have implications for advertisers shelling out money for Internet ads, trend watchers trying to understand what's cool among young people, and companies whose products or services get plucked for notice."

Earlier this year Brant posted a blog about Kevin Killian, who is writing a book solely about the 1,000s of reviews he's written on Amazon.com about books, movies, music, and other every day products. Killian is a prime example of an ordinary person who is influencing the market place. At Bazaarvoice we have found similar trends to support the WSJ's findings. Across all of our clients there are heavy reviewers that are influencing their respective communities. For example, take "jason7" from Cabela's, who has already written over 200 reviews since Cabela's launched ratings and reviews five months ago or "Kerri" from Macy*s, who has written 124 reviews since Macy's launched four months ago.

There's no question that reviewers made up of ordinary people like me and you are speaking their minds, and the masses are listening. Your customers are actively seeking these influential reviewers to help them make the best purchase decision possible. The clients that will be most successful in this Web 2.0 era are those that can listen and act upon what their customer communities are telling them.

The question is: What are you going to do to leverage the most influential members of your community?

Here are a few key recommendations on how to build and foster your own influential online community:

1. Identify your company's top reviewers and supporters based on the quantity and quality of their reviews. You may also want to factor in their Net Promoter response to seek out your company's most loyal customers.
2. Provide incentives for these top reviewers. Encourage them to return to your site and continue writing insightful reviews that will benefit the rest of your online community. It's important to reach out to these reviewers, thank them for their feedback, and give them an incentive to return to your site. Ideas for incentives include: discounts off of their next purchase, free shipping, gift certificates, exclusive membership to your company's rewards club, or even a free sample of a new product before it's released to the public. These are great ways to ignite positive word of mouth throughout your online and offline community!
3. Highlight your top reviewers and put a name, face, and identity to these ordinary people. Remember, these reviewers are leading by example by making great purchases and they're kind enough to share it with the rest of your online community – for free! Ideas for recognizing your best reviewers include featuring a "Reviewer of the Week" on your website or creating a "Meet Your Online Community" section featuring all of your top reviewers. You can also use their compelling review content in email marketing campaigns, newsletters, circulars, and even in-store signage!

I encourage you to let your creative juices flow and comment on what your company can do to identify and harness your most influential reviewers (which, in our experience, are usually your "alpha shoppers")!

Round two is getting a little more interesting, as Blockbuster finally starts to leverage their stores to create a potentially more positive word-of-mouth offering. In today's Wall Street Journal, Blockbuster announced that they are letting subscribers of Netflix rent movies for free through Dec. 21 by simply walking into one of their stores and redeeming the tear-off address flap from the signature red Netflix envelope for the free rental. This is a promotion for Blockbuster's new "Total Access" feature, which lets customers return DVDs rented through its online service, which competes directly with Netflix, in their stores. Blockbuster announced Total Access in the November 1 edition of the Wall Street Journal with the following quote from their CEO:

"Customers shouldn't have to choose between renting online versus in-store, and they should never have to be without a movie," said Blockbuster Chairman and Chief Executive John Antioco in a statement.

This is a smart strategy as it enables Blockbuster to leverage something Netflix doesn't have – 8,500 stores located across 29 countries. It will ultimately lead to some positive word-of-mouth for Blockbuster, and a new competitive differentiator against Netflix. I, for one, plan to try this out over the holidays as the only downside to my Netflix subscription is sometimes I don't plan far enough ahead to have the movie I want when I want it.

However, it is hard to imagine that this will lead to a long-term competitive advantage for Blockbuster. The next wave that will hit is movie downloading, which will solve the only real challenge Netflix has (the wait time). And Netflix is planning to lead in that wave. Check out Reed Hastings' recent interview on 60 Minutes. And don't get me started on how great of a job Netflix does in creating high switching costs (or "community stickiness") with all of its great ratings and social networking features. Even though I will try Blockbuster again as a result of this promotion, it is unlikely I will dump Netflix.

What is the lesson learned here? Leverage your multichannel assets, like Blockbuster is finally doing, to earn "good profits", especially in the face of a competitor acting on your source of bad profits. This will help offset the negative word-of-mouth that your bad profits have generated with positive word-of-mouth. Also, reducing your sources of bad profits now will help prevent disruptive upstarts in the future. This is much harder to do than it sounds, and the book The Innovator's Dilemma does the best job of any I have read in explaining why.

Update: I just saw that Reed Hastings won the "Innovator of the Year Award" from the NRF (National Retail Federation), the parent of Shop.org.