Mark Kingdon is no ordinary boss. The new chief executive of Linden Lab, the company behind the virtual world Second Life, introduces himself by handing over a business card with the usual details on one side - a phone number, an e-mail address, it’s all pretty standard.

On the other side is a picture of his Second Life avatar called M Linden. The man in the picture is smartly dressed in a tailcoat and is flying through the air. Senior managers at the company have more outlandish avatars including a jellyfish and a beagle. He readily admits that being heading up Second Life is unlike other city jobs. He says he feels more like Governor Linden, the leader of a town “the size of Mexico City.”

But Mr Kingdon’s arrival at the company shows that the online world created by Linden Lab is growing up and getting real. Mr Kingdon is veteran of internet marketing, and took over as chief executive in May this year, replacing founder Philip Rosedale, who has taken up the role as chairman.

But has he taken up the job of ruling Second Life just when its bubble has started to burst? At the peak of the hype, Second Life was seen as the next great technological advance. It seemed that soon all of us would just have to get used to having a virtual existence to supplement our real lives. In its five-year history, 15 million people logged on to the service. But only half a million are active users. This means that the vast majority of users try it for a while and then give up.

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It’s been just as hard for the big boys to gather a virtual following. Google tried to get in on the act recently, launching its online world Lively in July. Critics and users were unimpressed, giving Lively a string of bad reviews, and the project is considered a flop. So are virtual worlds dying?

“It’s funny,” he says. “Our demise has been predicted many, many times and we keep growing.”

Mr Kingdon prefers figures showing that “user hours,” the amount of time people spend in Second Life, has grown steadily in recent months. Last weekend, 73,000 people were logged on to Second Life at the same time – a record for the service.

That remains a small number of people. To put it into perspective, Facebook has 12.6 million active users in the UK alone, or about a third of the online population. Second Life’s audience is minuscule in comparison.

Mr Kingdon accepts that the company has to do more to keep hold of the casual users who come on and try Second Life.

“We know we have to make the experience more useful to users from the start,” he says. “That means the way we educate them on how to navigate, move, clothe their avatar, find amazing experiences in-world, meet other people, and find groups that they can join."

He’s insistent that by this time next year, Linden Lab will have transformed the “first hour” experience, changing the Second Life interface to make it less intimidating for beginners.

Despite its smaller audience, Second Life has managed to make a profit, something that Facebook struggles to do. Second Life has a thriving virtual economy, with more than $1 million (£590,000) of user-to-user transactions a day.

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