With its clothing for avatars selling for as little as $1, American Apparel isn't exactly going to generate a lot of revenue from sales in Second Life. But that was never the intention, explains Raz Schionning, the company's director of web services. Instead, it wanted to boost the company's profile among what Schionning believes is a promising demographic. "If you have computer equipment and the bandwidth to run Second Life, you have to have a way to afford that, and you can probably be a reasonable consumer of our products," he says. "And even though Second Life has been around for three years, it's still cutting-edge, and just to be aware of it and to have gone so far as to get involved with it means that you're a trendsetter, not a trend follower."

In other words, these are just the kind of tech-savvy folks with disposable income whom lots of companies want to reach. Although it views its presence in Second Life as primarily a marketing tool, American Apparel obviously wouldn't be upset if avatars looked so good in their clothes that they influenced their human creators to go out and buy the same outfit. To help encourage that, last August American Apparel gave everyone who bought an item in Second Life the opportunity to buy the same piece of clothing in a real store at 15 percent off. Schionning believes that besides providing a locale for the marketing and incentives, virtual worlds hold promise as a place to test consumer reaction to new products before they're actually released. For instance, this past fall, American Apparel came out with denim trousers. Before they hit stores, they were on the racks in Second Life. "You could try them on before you saw them in real life," says Schionning.

While it's certainly a pioneer, American Apparel is far from the only company exploring the potential of virtual worlds. When Warner Bros. Records was getting set to release a new CD by one of its artists, Regina Spektor, they set up a listening lounge so avatars could sit around and hear some of her new songs. The room was designed to look like a New York loft and had a coffee table with a book on it that people could leaf through to learn more about the artist. "Their goal was to create awareness and to create a fan base and, just as importantly, to generate sales for her music," says Linden Lab's Fleck.