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Start-up takes virtual world idea to IM

Hoping to cash in on the popularity of virtual worlds such as EverQuest, a California company creates 3D instant messaging software complete with personalized avatars that show emotion.

Hoping to capitalize on the rising popularity of online virtual worlds such as EverQuest and Sims Online, a California start-up has created 3D instant messaging software complete with playful dogs, drivable cars and personalized avatars that show emotion.

Menlo Park-based There will make its program available in test form Wednesday. In its simplest form, the downloadable software, also called There, lets online audiences explore a digital universe--socializing, chatting and playing games.

Operating in secrecy for the past four years, the company is announcing several e-commerce and distribution partners at the Computer Electronics Show in Las Vegas this week, including Levi Strauss and Nike. The software maker plans to let users of its new program spend There "bucks" to buy virtual clothing, goods and activities.

In addition, There is partnering with companies such as Hewlett-Packard, graphics chipmaker ATI, and Discreet, a division of Autodesk, to help distribute the software later this year when it's ready for a wider public release.

"Facilitating interactions between people is the Internet's killer application, and for the first time, There will make online socializing a truly engaging experience," said Tom Melcher, the start-up's CEO.

Still, Melcher's company faces the specter of many a failed cyberworld.

Virtual worlds have long been a dream of software developers and computer fanatics. The rise of the public Internet in the mid- to late 1990s saw attempts at several such cyberspace hang-outs, from Communities.com's The Palace to an offering from Mattel's Barbie division. Most efforts ran into hardware and bandwidth limitations, as well as people's reluctance to interact in such a new way.

"This is one of the things that's been promised for nearly 10 years," said Jonathan Gaw, research manager for IDC. "Every time that something like this comes up, people ask what's different about it?"

But with better technology, greater adoption of high-speed connections and Internet socializing becoming a staple, a "metaverse"--or computer-simulated world--isn't far off, industry watchers say. The popularity of Sony's EverQuest, which has hundreds of thousands of subscribers paying $13 a month to access the game's vast fantasy world, and Sims Online are evidence that many people are ready for a digital escape, they say.

"Obviously the technology and graphics have gotten better (and) the Internet and broadband penetration have taken off, giving consumers a much better experience," Gaw said. "But in the end have we built something that people will pay for? Tough call."

There has raised $33 million largely from its management team, as well as from Sutter Hill Ventures and Trip Hawkins, founder of Electronic Arts. Shelby Bonnie, CEO of CNET Networks, publisher of News.com, also is an investor.

There plans to release its software to the general public in the fall of 2003.