In the real world, Edward Hall is a 29-year-old student studying for his electrician certification.

But in the world of Second Life, he is LoneWolf Mackenzie, an avant garde clothing designer with multiple stores.

Since its launch by San Francisco-based Linden Labs in 2003, Second Life, an online social game boasting more than 1 million users, has spawned its own community and economy, and has caught the eye of major corporations and educational institutions.

Hall, who lives in Louisiana, was drawn to Second Life two years ago because of the potential.

“When I came here, I was shocked to find how much I could do, it was a virtual world like no other,” he said. “Basically, you can bring anything in your imagination here.”

After downloading the free software from secondlife.com, users customize their on-screen avatar to traverse the virtual, 3-D world. It is not uncommon to mingle with robots and elves, catch a Duran Duran concert, or purchase virtual genitalia.

Although the game is free to play, if users want to own virtual land, buy the latest clothing, or purchase a cyber-prostitute, they have to purchase Linden dollars.

The Second Life currency is based on real money, with a fluctuating exchange rate of about 280 Linden dollars for every $1. Linden Labs makes money by renting virtual land, and charging a percentage to convert Linden dollars to real money.

Business is booming in this virtual community, with more than $500,000 USD being spent in the last 24 hours, according to Linden Labs. Industry estimates said users will spend more than $130 million this year inside of Second Life.

There is no scorekeeping in Second Life. Residents of the digital world play to meet new people, build virtual communities and structures, and maybe make a few bucks.

A virtual clothing store has become the only source of income in real life for 26-year-old Katt Shaw. Under the handle of DigiKatt Shaw, she sells virtual clothing for the gothic crowd. She described her business as “fair,” making almost enough to completely support her.

“Second Life appealed to me because it let me meet new people from all over the world, and the fact that I can, and have started my own business in here,” the Seattle resident said.

Companies like Adidas and American Apparel are trying to cash in. They rent virtual land from Linden Labs for a monthly fee, and have set up shop to sell their virtual wares.

For Sanjit Sengupta, a marketing professor at SF State, it’s no surprise that companies are using this virtual world to find new customers and sell products.

“I think the value they’re delivering is based on enhancing fantasy,” he said. “People play Second Life for vicarious pleasure. If these companies can help that pleasure, then it’s a smart move.”

Sengupta expects more companies to jump on the bandwagon because residents of Second Life are a desirable demographic – they tend to be younger, and they are actively involved with the medium.

“It’s a good opportunity to build brand-awareness,” he said. “Young people tend to be brand agnostic with a lot of things, but they’re very brand conscious with things they’re interested in, like music, clothing, and electronics.”

The 83 square miles, and growing, of virtual land in Second Life also offers educational opportunities. Author Kurt Vonnegut had an “in world” lecture, Reuters recently embedded a reporter, and colleges have used Second Life as a teaching tool.

At SF State, professor Jane Veeder used Second Life for portions of her “Design of the Virtual Worlds” class.

“It gave students a great opportunity to learn about Web 3-D design from a user’s-eye view,” she said. “It’s also consciousness-raising on how design can facilitate or get in the way of what you want to do.”

Students were assigned to research the virtual environment, and design and build in-game structures. Veeder liked Second Life because students weren’t allowed to import 3-D images. Instead, every item in the game, from clothing to virtual genitals to re-creations of landmarks, is made in the game by shaping cubes, known as primitives.

Adam Ashworth, an SF State alumnus, was in Veeder’s design class in 2004 and said he doesn’t understand what all the fuss is about.

“I used it only as long as I had to for the class,” he said. “It didn’t draw me in. You just stand around and talk. Why would people spend money on that? I found it boring.”

This semester, Veeder has switched to the online game ToonTown because she felt students would appreciate the variety.

“For designers, Second Life tends to get boring after a while,” she said. “They’re often not cocktail people who like to stand around and chat.”