The online virtual world Second Life has become enormously popular, and has received massive hype as a place where businesses should set up a “virtual shingle” and connect with young, educated, wealthy people — even though it could cost $15,000 or more. Reuters even “opened” a bureau to report on life in Second Life.

Our main concern: can a virtual presence serve as a lead generation tool in the real world?

Now, Business Week is reporting the first of what may be the Second Life backlash: “Beyond Second Life: Companies thinking twice about the popular virtual world are finding more security and flexibility in alternatives.” http://www.businessweek.com/magazine/content/07_24/b4038417.htm.

As Business Week points out, there may be some real value to virtual worlds — for education purposes (Stanford University’s Medical Media and Information Technologies center is using virtual worlds to give “medical students to practice responding to a triage situation in a mass-casualty event such as a chemical, biological or radiological attack—situations the students typically don’t have much opportunity to experience in reality). Or as an alternative to video conferencing.

But not necessarily for lead generation, making the upfront investment difficult to justify for B2B companies. Adidas and GM sell digital versions of Reeboks and Pontiacs, according to the article; I wonder if they post their virtual earnings each virtual quarter. Even some consumer companies — like Coke and Starwood Hotels, have found Second Life gives them a virtual headache.

On the other hand, participating in online communities and networks may certainly serve as a worthwhile lead generation tool.