Thursday, November 20, 2008

Why did Google shut down Lively?

Official Google Blog: Lively no more Funny how things turn out...

Just a month ago I was in the Virtual Worlds London event listening to Niniane Wang, Google engineering manager talk about their fledgling new 3D chat service, Lively.

She spoke impressively, and sounded like they had a great handle on the teething issues and plan for the future.

Today we hear the news that Google has abandoned Lively. What a difference a few short months make.

True, expectations were sky high for Lively (it is Google after all) and they had a rocky start, but they had some unique elements such as being browser based and able to be embed anywhere.

And as IMVU and Meez have shown, it is possible to build an active and thriving 3D chat community with a bit of time and focus, and other focussed avatar sites (Stardoll etc) continue to grow rapidly and new players emerge and innovate.

So why did they kill it?

My guess is that it was considered just too removed from their core business of search and online apps.

And as we all know, the first things that tend to get cut during a recession are non-core businesses.

It was always a bit of a stretch for Google to get into the virtual worlds business, especially with no clear business model: there was no virtual economy, nor advertising in Lively. The closest consumer entertainment product they have is arguably YouTube.

Even at the London event Niniane admitted there was a lot of internal debate about business model and some things were still in the air, months after launch - for example whether there should be a Google virtual currency.

Put lack of business model together with a lack of track record or core competency in operating online games or virtual worlds it is unsurprising Google will exit the space...and the space will go on and grow without it.

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