Archived report. This report was archived in 2009 and has not been updated since. Virtual worlds are just one example of the developments occurring as part of the Web 2.0 evolution. The most high profile of these is ‘Second Life’; the popularity of this virtual world has exploded over the past couple of years from around 1.5 million users reported in 2006, to nearly 13 million registered users in 2008. However the departure of some high-profile companies in 2007 has the industry wondering if its growth will continue unabated and attention is turning towards its competitors such as There.com. With recent entrants such as China’s HiPiHi and the emergence of worlds designed specifically for teenagers and children - this sector continues to be a focus for marketing opportunities. This report provides an overview of virtual worlds, including trends, developments and initial statistics. Second Life is used as a case study.