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Avatars are hot. I’ve got ’em in SecondLife, Yahoo Chat, not to mention a few for bulletin board posting. Yahoo chat avatars are the easiest to create but you can’t do much with them, they just stand there. However, I love the audibles. Flirting, taunting and soundbites from bands add a lot of laughs to the conversation.

IMVU is similar to Yahoo Chat avatars, taking it to the next level with a window for interacting with other avatars, and general movements. Kind of like SecondLife Lite. Here’s a review of IMVU. I tried IMVU last year and was not impressed. PC only, clunky and it crashed a lot. Today it looks a lot more polished, enough that Allegis Capital and Menlo Ventures pumped $9 million dollars into the company. PaidContent describes IMVU as a cross between avatar-based services, IM and social networking.

That is a heck of a lot of cash for a 3D chat company, especially after you see CrazyTalk. As one of the founders of the Boston Computer Society Virtual Reality Group in 1993, I’m more excited by CrazyTalk, which is almost movie-quality CGI. Reallision, the makers of CrazyTalk, offer a studio for creating avatars, a messenger product and virtual hosts like Oddcast. They have a deal with Skype, and it’s very cool to use while chatting.

Everyone is in a rush to offer add-in avatars and video and photo-sharing services to Myspace. The problem with the Myspace add-ins is that only a small percentage of users will pay for them, you have to either license your product or stuff it with ads or try to lure people back to your website. I can’t imagine VC thinking they are investing in a free MySpace add-in, they’re probably betting they can find find someone to buy the company.

Enticing people to download yet another instant messaging client is going to be very difficult. IMVU is a kludgy PC-only application with windows 3.1 interface populated mostly by teenagers. Competition is fierce and offers far more mature products and services. Yahoo chat is free, works great and the Mac version is coming out shortly.

IMVU is not a clear winner by any means and they have their work cut out for them.

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