Written by Awportals.com

In the summer 1994, Ron Britvich (Protagonist) created WebWorld which was the first 2.5D world where tens of thousands could chat, build and travel. WebWorld operated on the Peregrine Systems Inc. servers as an 'after hours' project until Britvich left the company to join Knowledge Adventure Worlds (KAW) in the fall of that year. On February 1995, KAW spun off their 3D Web division to form the company Worlds Inc..

Britvich was eventually joined by several other developers, and the renamed "AlphaWorld" continued to develop as a skunk works project at Worlds Inc, internally competing with a similar project known as Gamma. While AlphaWorld was developing a strong cult following due in large part to Britvich's open philosophy of favoring user-built content, Worlds, Inc. favored Gamma for the company produced contract projects for Disney and others.

On June 28, 1995, AlphaWorld was renamed Active Worlds (from Active Worlds Explorer) and officially launched as version 1.0. Around this time, Circle of Fire (CoF) was formed to create content for the Active Worlds universe. This company would end up playing a pivotal role in the future of the product.
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Source: http://en.wikipedia.org/wiki/Active_Worlds#History