Valley of the Virtual Dolls

Girls are spending hours dressing up avatars online—and both startups and big brands such as Disney and Mattel are vying for their attention

by Anastasia Goodstein

When you think about paper dolls, you probably think about children from past generations painstakingly attaching little outfits onto a cut-out female figure. Paper dolls have come a long way since then.

Teen and tween girls these days spend hours dressing up dolls—only these are online, in the form of avatars, or virtual representations. Consider Mattel's (MAT) Barbie, who was also a favorite paper doll. She now has a virtual world called Barbie Girls where girls can create their own avatars and try on clothes at a virtual mall. And Barbie isn't alone. A whole wave of avatar sites is hoping to capitalize on this age-old desire.

Part of the fun of virtual worlds for teens is experimenting with identity. Boys do this all the time in video games where they assume fantastic identities very different from whom they are in real life. For tween and teen girls, fashion has always been a big part of self-expression. How else to explain the popularity of Teen Vogue, which stands tall even in a ravaged teen-magazine market, where many publications are going online or folding altogether.

Passion for Fashion

And while most girls can't afford the junior couture featured in Vogue, they can afford virtual couture online. And for this creative, tech-savvy generation of girls, it's not always enough to just click and wear virtual clothes or accessories. Many design their own. They even have a role model. Lauren Conrad from MTV's (VIA) The Hills has her own virtual clothing line for sale in MTV's virtual Hills.

Virtual fashion is nothing new in online worlds such as Linden Lab's Second Life, an adult-oriented venue filled with fashion designers and virtual clothing outlets from chains such as American Apparel. But it's a relatively new phenomenon in the tween space. Helping fuel this trend is parental demand for safe spaces where their kids can hang out that are anything but MySpace, which has been plagued by instances of predatory behavior by adults.

But the real driver is the combination of girls' passion for fashion, their desire to socialize, and a high level of comfort with using digital tools to express creativity. Because of this, girls are spending lots of time online, dressing up and showing off avatars. Little wonder that young females—and venture-capital dollars—are gravitating to startups like Stardoll, which lets users create and dress celebrity paper dolls; GirlSense, a virtual doll community; and Gaia Online, a virtual world where avatars look like Japanese manga characters.

Building the Brand

It's also why traditional brands such as Mattel, Disney (DIS), and Trollz maker DIC Entertainment have entered the space. Each site—Barbie Girls, Disney Fairies, and Trollz.com—offers the user the ability to create her own character, play games, chat with other avatars, and decorate her own "room," or page. Startups Stardoll and GirlSense are also kid-friendly and compliant with the Children's Online Privacy Protection Act (COPPA). Gaia Online, Wee World, Meez, and IAC Interactive's (IACI) new Zwinktopia all cater to teens (and adults) 13 and up.