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While the real-world markets take a nosedive, a virtual world's economy is on the up and up, and its parent company is reaping the rewards. Second Life, the user-generated virtual world, generates almost $100 million in revenue a year, according to a new report on LAUNCH. A "company insider" says that Linden Lab has grossed over $75 million per year for the past three years and the company is profitable.

But this isn't just another nine-digit number in the sea of Web business news. Linden Lab, the parent company of Second Life, simply charges fees on financial transactions. Its revenue comes from an entirely user-generated economy built on real estate, virtual goods and services. Yes, there's also a sex industry.

The 3D virtual world Blue Mars has announced that it is restructuring, dropping its PC development to focus solely on Apple iOS. The company itself is also restructuring, with an unspecified number of layoffs, including the departure of CEO Jim Sink.

Once pegged as an up-and-coming competitor to Second Life, Blue Marks is a CryEngine 2-powered virtual world from developer Avatar Reality. On Friday, the company said it will no longer add new content to the PC version of Blue Mars, switching its efforts to develop a version of the virtual world on iPhone, iPod Touch, and iPad devices. The servers will remain online, but there will no longer be any technical support. Current city developers will no longer be charged monthly hosting fees.

Analyst firm Gartner has released its 2010 Hype Cycle Report, identifying those technologies it thinks have reached the "Peak of Inflated Expectations" as well as those languishing in the "Trough of Disillusionment."

Activity streams, cloud computing, and 3D flat-panel TVs and displays are among those at that peak. Gartner defines this as a "phrase of overenthusiasm and unrealistic projections." And although according to Gartner's map, it means these technologies may be on their way to mainstream, the next stop is one of disillusionment because those technologies failed to live up to expectations.

The number of users registered for virtual world sites broke the 1 billion mark during the third quarter of this year. That's the finding of KZero, a British analytics company that specializes in the virtual worlds and virtual goods market. Virtual worlds are those online communities where people operate avatars in a computer simulated environment, such as Second Life and Blue Mars.

That's an increase of 51 million from Q2 of 2010 and a 350 million increase from this time last year.

According to an announcement issued today by Linden Lab, the company that controls the Second Life virtual environment, changes are afoot. Thirty percent of the company's employees will be laid off as the company consolidates and closes its bureaus outside North America.

Linden Lab intends to move the Second Life environment to a browser- and mobile-based platform, obviating the need to download software. It will combine its product and engineering divisions. Future plans include migration to social networks, like Facebook.

For kids under 12 years of age, entertainment websites and virtual worlds are all the rage. My 8-year old daughter plays ToonTown a lot. Club Penguin and Moshi Monsters are also popular in this demographic. But are these types of sites fulfilling the potential and talent our kids have with technology?

In order to help us answer that question, we're asking those of you who are parents of a child aged 12 or under to do a short survey accompanied by your child. With this survey, co-hosted by Boston research firm Latitude, we're hoping to discover what kind of web apps kids want but don't necessarily have right now.

We see so many different collaboration tools that at times if feels like we are looking at the same environment over and over again.

Proton Media is entirely different. It is the most advanced collaboration environment we have seen in the market. We say this without hesitation.

When it first launched, the tech and business worlds were transfixed on Linden Labs' Second Life as a new marketplace. Science fiction fans flocked to the site for its Snow Crash and Matrix-like neo-apocalyptic feel. And finally, educators arrived to build inexpensive and immersive learning environments. While the hype has certainly dissipated with Second Life, the librarian and educator community remains. Today Linden announced the first statewide roll out of a virtual learning environment. Funded by a grant from the University of Texas State's Transforming Undergraduate Education Program the company will provide a huge space for faculty, students and researchers to explore a virtual undergrad degree program.

Despite the hype, only 11% of enterprises have adopted virtual worlds to augment their work, says a new report by Forrester. Virtual worlds have been around since about 1995, but it took businesses half a decade to realize the potential value within the enterprise.

But the research released this week isn't just an outline of the market: it's a how-to guide for doing business in a computer-generated universe. Vendors may not have done a very good job of marketing themselves to the enterprise to date, but there's still a huge opportunity for your company to get virtual, if you know how.

When you think of virtual worlds, the first one that probably pops into your head is Second Life, but in reality, there are a number of different virtual worlds out there. There are worlds for socializing, worlds for gaming, even worlds for e-learning. But one thing that most virtual worlds have in common is that they are places for play, not practicality. (Yes, even the e-learning worlds are designed with elements of "fun" in mind). Outside of some reports that virtual worlds will replace web conferencing in the enterprise, we haven't seen a lot of innovation in this space which would make businesses sit up and take notice. However, that may be about to change thanks to new software that lets you perform data visualization and manipulation techniques within the virtual world environment.