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To be perfectly honest, I’ve never tried using virtual world applications like Second Life – probably for reasons that have to do with stories like stalkers on these services and older, shady men posing as young women.  But Hangout Industries has brought a seemingly different type of virtual world app to the table, one that involves real socializing for a change.  The virtual world premise of the app is the same – and the graphics and physics are really excellent within the app.

The service is opt-in in terms of your existing social networks – meaning that you’re encouraged to only hang out with people your connected with in your real life on the service.  If there’s someone who wants to join your space or ‘room’, you have the option to let them in.  This is the feature that sets them apart from the other virtual worlds and adds the most value – you’re actually hanging out with people you know! Another feature that sets the service apart is that it’s hosted in the cloud and runs on your web browser – pretty cool.

I do think the opt-in feature is ultimately a great thing, it does probably also put a limit on the target age group for the service to teenagers and young adults.  Most adults I know don’t really like to be constrained to a room or prevented from meeting new people (hence Second Life’s popularity).  Young people on the other hand should have option to not let certain people join their activities, even if it is online in a virtual world.

Though the service is free to join and play around with, virtual worlds have perhaps one of the coolest abilities in their hands – revenue models through real product interaction. With Hangout.net, users can actually have their avatars wear real t-shirts from Threadless.com, and then go and buy the physical shirt from the service. Same thing with posters and a whole range of other products.  The service can then compile tons and tons of brand feedback on these products and give it back to the company – invaluable market research.

But the real value is with their CPM model – meaning that Hangout.net can track how many times a particular product shows up on the screen and for how long.  Users can also buy certain products, through a virtual money model they’ve implemented.  In any case, it’s a totally refreshing and new way to look at online advertising and I welcome it.

Even though the service is best suited for teenagers, I would recommend trying it just for the fun of walking around some of these rooms – it’s a very cool and well engineered application.  Hangout has raised $10 million in two rounds of funding, and was a part of the TehCrunch50 event last year.  Their traffic numbers haven’t been overwhelming as of yet (according to Compete), but the service is still rather young, so here’s hoping it will pick up going forward. Check out this video interviewing CEO Pano Anthos:

And their presentation from TC50:

Here’s another screenshot: