The Web's Next Wave of Fun

By MICHAEL KRANTZ/SAN FRANCISCO

It's 10:30 on a Thursday night at Kyle's House, and some ghostly creep with a blue face and wild white hair has come between a clan v.p. and a cute blond. The PuNK pOsSe group is hanging out on South Park Avenue; the No Limit guys are at Cartman's House. A naked Def Squad girl cruises Avatar Ranch. An anonymous admirer makes flowers bloom at the feet of Pink Glove in Wendy's Backyard. Oh, and the Mona Lisa head in the blinking, multicolored Apple baseball cap who's floating from room to room taking this all in? That would be me.

The Stone Age had its watering holes. The '70s had its singles bars. Bill Clinton has his little study off the Oval Office. Now cyberspace offers us the Palace, a planetwide sprawl of loosely interconnected chat rooms that in the past few months has spread like kudzu across the Net. Still haven't designed your own home page on the Web? Don't sweat it. This fall, at least, building your own palace is where it's at.

Conventional chat rooms, for those who don't live on America Online, are nothing more than screens of scrolling text produced by anywhere from two to a couple dozen users typing comments at one another. The rooms in the Palace, by contrast, are lushly decorated spaces peopled by creatures whose whimsical plumage may be even more important than what they have to say.

Moving from ordinary chat into palacespace is like stepping from grainy Kansas into technicolor Oz. Suddenly you're in a bar, on a beach, in Xena's Warrior Palace. Wandering through these computer-generated spaces are avatars ("avs"), visual markers of a human presence that can be pretty much anything, from a wolfhound to a smiley face, James Dean to your own humble head shot. Click on a spot in the room, and your av reappears there. Type sorry to the guy you landed on, and your contrition appears in a thought balloon above your head.

As does anything else you, or anyone else in the room, may have to say. A typical night will find upwards of 300 people scattered throughout the most popular palaces, which include South Park, Korn Korner and the original Palace Gate. "We add at least two new rooms every episode," says Tod Foley, who designed and runs South Park for Comedy Central. "Sometimes we go nuts and add six or seven. We look at it like a big online Renaissance fair."

The price of admission? Thanks to an enlightened, let-a-thousand-palaces-bloom distribution policy, the client software you need to visit palaces is free (at www.thepalace.com) as is the server software that lets you build your own.

Result: thousands of sites springing up like mushrooms in one of those sudden bursts of self-expression for which the Internet is famous. There's Anime Carnival and Mack's Mouse Hole, White Wolf's World of Darkness and Spirit's Haunted Palace. There are foreign-language palaces like Mexchat, Chatteria ("the Swiss Palace server") and intranet-quebec.com kids' palaces whose authentication software bars inappropriate visitors; adult palaces like SinCity and Nite Winds that...well, if you care enough to ask, you'd probably prefer to find out about those for yourself.

It all makes for an oddly vibrant community with its own language, social structure and economy. Wizards and gods keep order and help newbies get their feet wet. Trolling singles in supermodel avs move swanlike through mating rituals old as the species and new as the next Java upgrade. Soccer moms swap family snapshots and grouse about how the place has gone downhill since the damn teens arrived.

Ah, the teens. America's leading zeitgeist indicators are storming the Palace by the tens of thousands, in all their tribal, hormone-addled glory. They behave like adolescents everywhere, which is to say they dress badly, act obnoxious and travel in packs. Clans like Anarchy and the DiVas drape their slouching cartoon avs in baggy "sk8ter" duds and goof on one another with "scripts"--programs that let you string a strand of hearts around the neck of someone you admire or grandly urinate on someone you don't. In the Palace you never know what will happen. "The other night I was talking to this guy, and it turned out he was a Satanist," types a young South Park habitue named Wyld DiVa. "I'm Christian myself, but I'm very open-minded, and we ended up discussing theology for, like, three hours while all these kids jumped in and out. It was very surreal."

Well, what on the Palace isn't? The community's primary units of currency are scripts and props, the limitless rainbow of graphical snippets used to perpetually reinvent one's avatar: photos and drawings, bonnets and six-guns, mascots and blackboards, halos and bongs. Palace vets amass hoards of props and trade them like baseball cards. Sites on the indispensable A-to-Z List of active palaces blare come-ons like HUGE PROP MALL! Collect enough props and build a cool palace, and you can stage a runway show in your own private Versailles. "Vanity pages built the Web," says Randy Farmer, co-founder of Electric Communities, the company that bought the Palace earlier this year and is behind its latest resurgence. "And vanity servers will build the visual communities."

Maybe. Silicon Valley is littered with the wrecks of start-ups that failed to reach the visual-community promised land. In fact, the Palace was almost one of them. Created by Time Warner in 1995 and independent since '96, the Palace--like most of its competitors--hoped to turn a profit by charging for its software. By last winter, though, it had amassed just 300 sites and 50,000 users, and its investors were looking for a buyer to bail them out.

They found one in Electric Communities, a three-year-old start-up whose first product, a rich virtual world called Microcosm, proved too unwieldy for today's Web and has yet to be released. But CEO Larry Samuels had one edge over his rivals: his company wasn't (quite) bankrupt. Last spring, in a set of cash-free stock swaps, E.C. acquired both the Palace and OnLive Technologies, whose audio software lets multiple users talk live over the Net. In August, Samuels relaunched the Palace--and started giving the software away.

Zero proved to be the right price. In the three months since E.C. adopted its Tom Sawyer model (customers will grow your business if you can seduce them into painting fences for you), the number of active palaces has soared from 300 to more than 1,000. And that's not counting the thousands of unregistered sites E.C. isn't yet able to track. Without spending a penny on marketing, says Samuels, he's been able to boost the number of downloaded site-hosting servers to more than 15,000. The number of Palace users, in turn, has jumped from 50,000 to more than 300,000. By next April, he predicts, "we'll hit a million."

That's when the fun starts. A software upgrade due this month adds two crucial community-building features, paging and searching, that will let users locate and chat with anyone anywhere in palacespace. The OnLive audio software and Microcosm wait in the wings. And the updated servers set for release early next year will let E.C. finally start corralling those thousands of breakaway palaces--and festooning their screens with ads.

By then we'll know whether this fall's Palace surge is a fad or a genuine paradigm shift, the Net's first step toward the three-dimensional virtual world that cyberpunk writers have envisioned for years. Imagine the capitalist dreams that cheap bandwidth and visual communities the size of shopping malls might fulfill: try-it-on Gaps; virtual town halls; online nightclubs with live video and sound. "I'm not sure that even the guys at E.C. know what the Palace's future is," says Foley. Like the Web browser before it, the Palace has a chance to become that rarest of online creations: a machine that grows of itself.