Lessons learned from Google's Lively experiment

Not all Google endeavors turn into gold. Case in point: Lively, a virtual world launched less than five months ago, albeit in "beta." Google announced on its blog late Wednesday that it would shutter the product at the end of the year to focus on its bread-and-butter search business. Here's an excerpt from the post:

Google has always been supportive of this kind of experimentation because we believe it's the best way to create groundbreaking products that make a difference to people's lives. But we've also always accepted that when you take these kinds of risks not every bet is going to pay off. ... It was been a tough decision, but we want to ensure that we prioritize our resources and focus more on our core search, ads and apps business.

As of this morning, Lively had 10,000 active users who logged into the virtual world at least once within the past week. "When you're talking about building a business, those are not huge numbers, especially for a company the size of Google," said Chris Sherman, executive director of Virtual Worlds Management, an Austin, Texas, company that manages trade shows and publishes research on virtual worlds.

Apparently, Google management thinks so too. "It’s a question of setting priorities," spokeswoman Sara Jew-Lin said. "We’re trying to focus on the core business, and this is part of that."

The statement suggests that ...

... Google, which is notorious for keeping slow-to-catch-on products in beta way past their prime, may be choosing to cut bait more quickly now that there are fewer ad dollars to go around. It may also be a reflection of Google growing up, Internet analyst Greg Sterling said.

"This is a watershed time for Google," he said. "They grew up under this enormous boom where engineers were free to experiment with products like this. Now Google is seeking to grow under pressure from the economy, and it may be trying to do so in a more planned way. So the freewheeling nature of its earlier culture may be giving way to reflect their status in the market."

There's another lesson, Sherman said: "Don't launch a half-baked product." While Google succeeded in creating a virtual world that was easy to use, he said, it didn't give people enough things to do. Lively had no virtual currency and few advertising opportunities to attract businesses to set up shop, among other deficits.

"There’s a lot of power and potential with all the Google offerings, like instant messaging, Google Maps, Google Earth, Google Checkout," Sherman said, "but a lot of these things weren’t integrated [into Lively]. It was very disappointing."

Here's another lesson, courtesy of other virtual worlds that collapsed in recent years (such as Disney's Virtual Magic Kingdom): Turning Lively off come Dec. 31 may not be that easy.

"People in virtual worlds establish a sense of community and belonging" that's difficult to uproot, said Dmitri Williams, assistant professor at the USC Annenberg School for Communication in Los Angeles. "It would be the equivalent of someone erasing a neighborhood community center. It’s bound to ruffle feathers. These are important spaces for people."

Such was the case for VMK, which Disney closed earlier this year, albeit at a great cost to its public image. Thousands of players protested.

But it's not as if people will have nowhere else to go. Dozens of virtual worlds have cropped up over the last two years, fueled by hundreds of millions of dollars in venture financing. In one instance, hundreds of players of a game called Uru: Ages Beyond Myst recreated their community on two other virtual worlds, There and Second Life, according to a study of virtual communities in exile by Celia Pearce, a researcher at the Georgia Institute of Technology.

Wherever they migrate next year, it won't be Lively.

-- Alex Pham

Photo: Image from the Lively virtual world. Credit: Google