Websites cultivate market in the making: children

Mathew Ingram

Toronto Globe and Mail

May 3, 2007

By now, we've probably all gotten used to the idea of online social networks thanks to the rise of MySpace and Facebook, where users can share their photos or post their thoughts. Many people may also be familiar with online games and virtual worlds such as World of Warcraft or Second Life, where users can create a character -- or "avatar" -- and engage in everything from shopping or chatting to slaying imaginary beasts.

The vast majority of these sites and worlds, however, are aimed at teenagers and adult game players, but some companies, spotting a potential market in the making, are focusing on even younger users. There have been sites that target "tweens" for some time now, including avatar-based services such as Gaia Online and Habbo Hotel, but new ones seem to be emerging every week, and some are specifically targeting preteens and kids of elementary school age.

One of the most popular recent arrivals -- a site called Webkinz - is a Canadian creation. Webkinz, a combination of online game and social network, was developed by a toy maker called Ganz, whose plush animals are popular toys for young children. Kids who get a Webkinz doll -- there are many different varieties -- log into the website with a special code printed on the toy's tag and then can access an online world where they can play games and spend their virtual money on toys and clothing for their virtual pet.

A similar site, but without the real-life toy, is called Club Penguin -- also a Canadian creation. Children can log in and create an avatar (a penguin) and play a variety of games or chat with friends through an instant-messaging application. Some of the activities are free, but others require payment.

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A new addition to the market is called Zwinktopia, a virtual world spinoff from a service called Zwinky, which offers customizable avatars and icons for use with instant messaging software, as well as a kind of community based on those avatars. Zwinktopia takes it to another level by creating a Second Life-style world where users can interact with other avatars and with the environment.

These games and worlds may be for kids, but that doesn't mean they aren't potentially big business. Zwinky had almost five million unique visitors in March, and Gaia Online had two million. Zwinky is part of IAC/InterActive Corp., which includes browser-based and add-on software such as Smiley Central and Cursor Mania, which generates more than $100-million (U.S.) in revenue a year, according to TechCrunch.com.

Disney has also been making increasing moves into the market. It has a site called Toontown, where users can play games involving Disney characters. And the company recently announced Disney Xtreme Digital, which will let pre-teens create their own MySpace-style websites and import images, music and videos -- although users can use Disney-created content only.

Such sites raise a number of issues, including the extent to which they advertise or market to children and also the question of how long a site aimed at tweens might remain popular with such a fickle age group. What is clear is that social networking, online chatting and virtual worlds are no longer just for teenagers and twenty-somethings.