In 2003, Daniel Terdiman, a tech reporter then freelancing for Wired, heard about Au’s work and began trying to convince editors at Wired, and later C-Net, to let him cover Second Life. Last October, Terdiman engineered the creation of a C-Net bureau in Second Life, where he used his avatar to conduct town-hall-like interviews with Second Life newsmakers in front of an avatar audience. At one point, this oh-so-modern endeavor was interrupted by an audience member who mischievously triggered a rain of virtual male genitals, a protest against Terdiman’s controversial interview subject, an in-world real-estate mogul who had made a lot of money and a lot of enemies.

Then, in early 2005, the Brooklyn-based freelancer Mark Wallace was tired of reporting about equity markets in the Persian Gulf and about millionaires for Details. He wanted a new beat. He logged on to Second Life, discovered an ad for a job at Ludlow’s Herald, and signed on as Walker Spaight, Urizenus Sklar’s reporting partner.

Susie Davis, a copy editor in Connecticut, also jumped into Second Life. She started reporting there in April 2006. She could have been anything in that world, which she visited outside her eight-hour copy-editing shifts. She thought she’d join a Second Life book club. “The book club I picked hadn’t met in six months,” Davis told me. She could have spent her Second Life time dancing in discos, but, she said, “If you’re going to dance you might as well dance for real.” Reporting seemed the most interesting. “The art of chasing a story is what kept me in Second Life,” she says. By the middle of 2006, her avatar, Ute Hicks, was hired as editor of the Second Life Business Magazine, a monthly publication that lasted roughly six months, until its publisher shut it down (according to Davis, the publisher was wrapping up a stint as a defense contractor in Afghanistan, and returning to America where he would have less free time to log on to Second Life). Davis had a fallback though, because while Ute Hicks was editing the business magazine, another avatar that Davis used, one Marvel Ousley, was helping to start the Second Life News Network, a contender to take on the world’s dominant media outlet, The Second Life Herald.

Those were the small engagements. Then Reuters got involved, and phase two of journalism’s evolution in Second Life was firmly under way. Last summer, Philip Rosedale met the Reuters CEO, Tom Glocer, at the elite Allen & Company media and technology conference in Sun Valley, Idaho. Glocer heard Rosedale speak about Second Life, and, according to Rosedale, the two brainstormed over lunch about having a Reuters reporter enter that world full-time. One rationale for Reuters was the business angle of Second Life. There was an economy in there. The Linden dollar, the currency of Second Life, was freely transferable to U.S. dollars (as of June 13, the exchange rate was 266 Lindens to every U.S. dollar). A resident who built cool virtual motorcycles could sell them to other residents for Lindens. Then Linden Lab would transfer that “fake” money into real money in the resident’s credit card account. (Money can be transferred either way). As in the real-world economy, someone who makes things that people want or need could turn a profit. People were trying to make careers in this world. (Of the more than 12 million transactions in May in Second Life, some two hundred were for upwards of $2,000.)

Glocer bit, and in August 2006 Adam Pasick, a London-based reporter for Reuters, was assigned the Second Life beat, with a virtual Reuters building and a special feed on Reuters’ Web site to showcase his efforts. “Honestly, it sounded like a career killer,” Pasick told me. “The whole idea sounded faintly ludicrous that we’re going to cover this world that doesn’t quite exist.” The bureau opened in October and Pasick quickly warmed to the concept, finding rich material in the crackdown on casino advertising, profiles of entrepreneurial builders, and protests against the invention that allowed users to copy anything they encountered in the virtual world (Second Life’s own copyright infringement problem). “The more I got used to things in Second Life,” he says, “the more it just felt like another reporting job.”

Stephen Totilo writes about video games for MTV News.