SWOT Analysis: ABC and Reuters in Second Life
This paper presents a SWOT analysis of two media organizations — the Australian Broadcasting Corporation (ABC) and Reuters — and their respective strategies within the Second Life virtual world. It examines ABC's content-driven approach, its community-building tactics, security vulnerabilities, and the challenge of converting virtual traffic into real revenue. The paper then analyzes Reuters' brief Second Life bureau, evaluating its brand continuity, lack of strategic purpose, and ultimate withdrawal from the platform. Both cases are assessed through the lens of emerging eBusiness models, with particular attention to the viability of cross-promoting real-world and virtual-world media properties in an environment of stagnant user growth.
- ABC in Second Life: Strengths: ABC's content strategy and audience engagement tactics
- ABC in Second Life: Weaknesses and Threats: Security vulnerabilities, profitability gaps, and stagnant growth
- ABC's eBusiness Model in the Virtual World: Infomediary and community models applied to virtual media
- Reuters in Second Life: Strengths and Weaknesses: Brand continuity versus lack of strategic purpose
- Reuters: Opportunities, Threats, and Exit: Missed opportunities, competition, and Reuters' withdrawal
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What makes this paper effective
- The paper applies a consistent SWOT framework across two distinct organizations, enabling direct comparison of their virtual world strategies.
- It grounds abstract strategic analysis in concrete examples — such as the 2007 hacker attack on the ABC island and Reuters' closure of its Second Life bureau — giving the argument specificity and credibility.
- The discussion of eBusiness models (infomediary, community) adds theoretical depth beyond a standard SWOT checklist, demonstrating applied business knowledge.
Key academic technique demonstrated
The paper demonstrates comparative case analysis within a structured framework. By systematically applying SWOT criteria to both ABC and Reuters, the author shows how the same analytical tool can reveal fundamentally different strategic outcomes — ABC pursuing a cross-traffic eBusiness model while Reuters failed to connect its virtual presence to any revenue-generating objective.
Structure breakdown
The paper opens with ABC's SWOT analysis, moving through strengths (content variety, audience alerts), weaknesses (security, lack of profitability), opportunities (cross-traffic flow), and threats (vandalism, stagnant growth). It then evaluates ABC's eBusiness model before transitioning to a parallel analysis of Reuters, covering its brand continuity as a strength, lack of strategic purpose as a key weakness, missed opportunities, and the competitive and structural threats that ultimately led to its departure from Second Life.
ABC in Second Life: Strengths
The Australian Broadcasting Corporation (ABC) enjoyed some early success in the Second Life virtual world. In 2007, the company was receiving 1,980 visits per week to its site (Winterford, 2007). ABC built this success by offering a wide range of content on its "island." The ABC island contains a mix of entertainment and information, with the entertainment component being particularly strong for two reasons. First, it features uniquely Australian content — a relatively distinctive draw. Second, ABC places emphasis on the same types of attention-grabbing entertainment one would expect in any traditional medium. In essence, the ABC island is a virtual rendering of a newspaper or television channel, which plays to the inherent nature of the virtual world as a form of consumer entertainment. ABC draws traffic because it provides a variety of entertainment to its visitors, making the product offering itself a key strength.
Another strength is that ABC actively drives traffic to its site. The corporation maintains an "ABC Friends" program, which allows users to receive updates on new events and announcements related to the ABC island. This technique is common for businesses in the real world but less so for media companies, whose ever-changing websites and channels make consumer alerts seem less necessary. However, within the virtual world, such outreach is more of a necessity — partly because the company's brand does not carry as much equity in that environment, and partly because the virtual world has a relatively small population.
ABC in Second Life: Weaknesses and Threats
There are notable weaknesses in ABC's virtual world strategy. One is that the company is vulnerable to security breaches and vandalism. In May 2007, the ABC island was nearly destroyed by a hacker attack. Without adequate security, the island was "bombed" by vandals. While the resulting publicity likely helped drive additional traffic to the ABC island, the incident clearly highlighted the corporation's security vulnerabilities in the virtual world.
The other main weakness is that ABC's virtual world presence is not profitable. At this stage of development, the virtual world functions largely as a marketing tool. This explains ABC's emphasis on content, but at some point the company will need to justify the expense and effort with tangible revenues.
There are also meaningful opportunities. ABC can use the island to drive more traffic to its other media properties. Because the virtual world does not provide a platform for direct sales, it serves as an additional marketing channel. ABC should therefore leverage the traffic it gains in the virtual world to direct visitors back to its real-world properties, effectively creating a two-way traffic flow between the virtual island and its real-world website.
Threats, however, are significant. The first is vandalism, as the 2007 hacker attacks demonstrated. An even larger threat is the slow uptake of Second Life as a platform. In any other media form, 2,000 visits per week would be considered negligible traffic. Such figures are accepted in the virtual world context because it is a new medium that has yet to reach critical mass. Nevertheless, questions remain as to whether investments in the virtual world will prove worthwhile. Traffic at Second Life largely stagnated for much of 2008, before beginning to recover toward the end of that year (Wagner, 2009). This stalled growth calls into question the long-term viability of the virtual world as a media form, and represents the most significant threat to ABC's Second Life presence.
Works Cited
Winterford, Brett. (2007). Virtual Worlds a Risky Bet for Business? ZDNet Australia. Retrieved April 16, 2009 from http://www.zdnet.com.au/insight/security/soa/Virtual-worlds-a-risky-bet-for-big-business-/0,139023764,339281415,00.htm
ABC Island in Second Life. (2009). Australian Broadcasting Corporation. Retrieved April 16, 2009 from
Wagner, James Au. (2009). Exclusive: Second Life Starts to Grow Again. Gigaom. Retrieved April 16, 2009 from http://gigaom.com/2009/04/15/exclusive-internal-second-life-data-shows-returning-growth/
Reuters Second Life page. (2009). Retrieved April 16, 2009 from http://secondlife.reuters.com/
Krangel, Eric. (2008). Why Reuters Left Second Life, and How Linden Lab Can Fix It. Silicon Alley Insider. Retrieved April 16, 2009 from
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