Reuters reporter Adam Pasick has a virtual world doppelganger called Adam Reuters. They’re one and the same, although Adam Pasick reports from the real world while Adam Reuters reports from Second Life, the avatar-populated virtual world. And so far it looks like he’s doing some serious economic reporting on the phenomenon of alternative financial exchanges that can crop up in these complex yet non-existent worlds.
I must admit I think this is a bizarre phenomenon — putting journalists inside virtual worlds to report on what’s happening in these places. But as strange as it seems, Pasick is not the first journalist to write about the goings-on in these cyber places. CNET News has a permanent virtual presence in Second Life.
But does CNET have a “virtual building made to look like a hybrid of Reuters’ London and Times Square buildings?” I think not, and therefore it looks like Reuters is throwing some serious cash at the effort.
Speaking of cash, one of Pasick’s, er Reuter’s, first reports from Second Life focuses on Congress is investigating the tax implications of these virtual worlds. Even though the money in Second Life consists of just a bunch of bits, 0s and 1s, real world funds can back up some of the cyber-world transactions.
It’s pretty clear how to handle virtual world cash-outs, tax-wise.
The rapid emergence of virtual economies has outstripped current tax law in many areas, but there are some clear-cut guidelines that already apply. For example, people who cash out of virtual economies by converting their assets into real-world currencies are required to report their incomes to the IRS and other national tax authorities, depending on where they live in the real world.
But what about capital gains, and conducting asset valuations? That’s totally new territory for the IRS.
Less clearly defined is how to deal with virtual income and capital gains that never leave the virtual economy. In the real world if you earn income or own an asset that increases in value, you are usually required to pay taxes. In a virtual economy the situation is unclear.
“Let’s say the IRS decides they want a valuation of your assets. We don’t have a stock market where we can as of the 31st of December, these assets went up, these went down,” [game designer Sam] Lewis said.
I don’t think I realized before how much activity takes place in Second Life, having never made it off “Orientation Island.” On second thought, I’m glad we’ve got reporters in there.
Posted by Cynthia Brumfield at 4:01 PM | Print | Comments (0)
Bernstein Research had an interesting photo (click on thumbnail) in its weekend Media Blast newsletter. Analyst Jeff Halpern said that a fan had sent in a photo of an active Verizon FiOS connection point above Chuck Dolan’s home mailbox in Oyster Bay, Long Island. Dolan is the Chairman of cable company Cablevision Systems, which is in an increasingly nasty competitive fight with the telco’s fiber-to-the-premises broadband and multichannel video services.
Here’s Halpern’s take:
Of course, we’ll give Mr. Dolan the benefit of the doubt and assume that his rationale for having FiOS is executive market research rather than simple admission that Verizon offers a superior service in Oyster Bay than his own company.
Thanks Danny!
Posted by Cynthia Brumfield at 10:15 AM | Print | Comments (0)
It was bound to happen sooner or later…News Corp. is in a wrangle with soon-to-be-owned-by-Google YouTube over the upcoming mound of video ad revenue the search giant plans to generate with its video-sharing site, according to this piece by Business Week’s Steve Rosenbush. News Corp.’s MySpace currently displays millions of YouTube videos — the social networking giant accounts for one-third of YouTube views.
If Google’s going to get even richer with YouTube by embedding video advertising in YouTube’s clips, News Corp. wants it share of the wealth. Google’s CEO Eric Schmidt and News Corp.’s Rupert Murdoch are apparently in talks about how to work out this deal.
Google CEO Eric Schmidt and News Corp. CEO Rupert Murdoch have opened a series of meetings between the companies in an effort to clarify their relationship. By holding the meetings at News Corp., “Google has shown how seriously it takes News Corp. as a partner. Both companies want to work out something,” said Rick Corteville, executive director of media at Organic, a digital communications agency.Posted by Cynthia Brumfield at 10:04 AM | Print | Comments (0)
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