Well That Was Quick

So in 2009, Google Lively will be Google Dead-As-A-Doornaily.  We never got too excited about Lively's current form around here.  I was always confused about how it aligned with Google's core business.  Still, it's too bad to see the big G moving out of this space and admitting defeat.   More news via Google.  A brief post-mortem after the fold.

Hindsight is always 20/20, but just as Google's entry into virtual world signified something more than it delivered, its exit from the marketplace is bound to strike those who don't grok virtual worlds or Google as something equally symbolic.  As a student of Google and virtual worlds, here's my quick analysis of what went wrong.

Virtual world businesses today are about three things (preferably integrated):

• Make compelling content.  See Blizzard.  If you build a multi-million dollar virtual theme park with cool toys and flying animals that people can ride, people pay for tickets and you can be a virtual Disney.  (And Disney gets this.)
• Sell trinkets.  See Maple story.  If you build something really nice and shiny and give away access for free, you can still make bucketloads of money by selling power-ups, blue hair dye, wedding quests, additional avatars, etc.  (Webkinz gets this.)
• Let them build it and they will come.  The entertainment industry has always underestimated the interest of people in obtaining the tools they need to entertain themselves.  Web 2.0 is a tricky proposition for a variety of reasons, but it actually can be done in a virtual world.  (Second Life gets this.)

So how does Google line up against these strategies.

• Making content? Google doesn't actually make new content.  It depends upon others to make new content and then it sends out the Googlebots to index that content and deliver up contextualized advertising.  The content Google wants to index and monetize is ideally going to be free (from Google's perspective).  Google makes its current profits primarily by monetizing the Web.  Google did not make the Web.
• Selling trinkets? From the standpoint of its users, Google is free.  Its brand value is primarily about getting cool stuff (search, mail, maps, books, you name it) for free.  So do you actually want to pay Google for something (anything)?  More specifically, do you want to pay Google for avatar hair dye?  Should Google actually want you to pay it for avatar hair dye?
• UGC?  This is where Google should, in theory, be able to pull off something interesting.  They own YouTube, after all (they bought it).  But here's the tricky point: despite what popular pundits may think, virtual worlds and UGC don't always blend well.  They are not peanut butter and chocolate, they are caramel and fish.  You need a clever chef.  Worse still, if Lively was to be built on UGC, it launched with almost no tool set for making UGC, and despite that limitation, was immediately subject to UGC's bugaboo -- new users saw the most popular rooms had sexual themes.  Flashback to what happened with the also-dead Sims Online: "UGC is very important and is coming any day, as soon as we can talk the lawyers into it."

But the real problem here, I think, was that Google's core business is contextual advertising based on datamining.  To maximize eyeballs, Google wants to control and monetize big data fields that it does not own (like the Web, all books, your home video collection, your mail, the Earth).  It's pretty darn good at that. 

Lively, otoh, lets Google make and completely own something little that it can't monetize.  See a mismatch?  You can't monetize and datamine the eyeballs if you can't attract the eyeballs--and you need to build (or let people build) to attract the eyeballs.

Still, despite it all making sense from the outset, no schadenfreude here.  More of a mild pathos.

[Links, pointing to the obvious targets, may soon be retroactively added.]