Second Life's "Wild West" — the land of start-ups and no cops, yet

The buzz around the growth of virtual world site, Second Life, is drawing more scrutiny from real-world regulators who fear they’re losing grip with the growing economy.

The site appears to have hit a sort of critical mass — and the attention is fueling even more activity.

A U.S. congressional committee has launched an investigation of the site, to see that people pay taxes properly on income they make at the site. Outsiders are scratching their heads at reports that several thousand people are pulling in $20,000 annual incomes by selling virtual goods and services, and saying “How can I get a piece of this?” Silicon Valley venture capitalist Bill Tai has been pitching Second Life founder, Philip Rosedale, on the idea of creating a central bank, which Tai would — benevolently, of course — run himself. Rosedale has held him off.

crayon.bmpAnd now there’s a marketing start-up, Crayon, which says its launch Thursday will be the first real business to launch inside of the site.

Up to $500,000 in transactions take place daily at Second Life, and the economy is growing by 10 to 15 percent a month.
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