On the Internet, you can represent yourself as a different person, often called an avatar. There are a number of games which use the idea of an avatar in a simple chat program in a virtual world. There are a number of these games which are designed for kids 12 and up, some of which have features other than chat.
Games like "IMVU" are chat-only; instead of having a virtual world, they put your avatar on a 3-D backdrop and let you chat with other users. There isn't much else in these games, except for the chat functions. You can decorate your avatar with a whole wardrobe full of new costumes. In some games, you can even purchase new ones with virtual money, or real money in what are called "micro-transactions" where you purchase virtual items for a few dollars.
A massively multiplayer online game means that there are hundreds or thousands of players on the game at any given time. Most of these games also include a chat function which allows you to interact with other players, partly to make new friends and partly to communicate with teammates and fellow explorers. Many of these, like "Free Realms" also function as Massively Multiplayer Online Role-Playing Games (MMORPGs), where you have a 3-D chat game in the "villages" of the world, and combat games in the "dungeon" areas.
Some avatar games are more like a hybrid of the other two--there is a chat section, and there are areas with a more interesting game. For example, in "Digimon Battle," you can battle other trainers' Digimon, or simply hang out and chat with them for a while. "Chobots," on the other hand, includes a whole host of mini-games, such as racing games, that give you more ways to interact with your friends and other players.
Some of these games also give you areas where you can create your own version of the world and then invite friends to check it out. In "Habbo Hotel," you get a hotel room which you can fill with virtual furniture you can buy from the in-game store. In "Atmosphir," you can actually build levels and mini-games for your friends to play and explore with you, all from the game's built-in level editor. You can also explore other players' games and get inspiration for your own.