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Well That Was Quick

Google Lively

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 to entertain themselves.  Web 2.0 is a tricky proposition for a variety of reasons, but it 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 other to make new content for it and then it sends out the Googlebots to index that content.  The content Google wants to index is free (from Google’s perspective).  It makes the vast majority of its profits by monetizing the Web.  The Web is free.
  • Selling trinkets? Google is free.  Its brand is about getting cool stuff (search, mail, maps, books, you name it) for free.  Do you want to pay Google for something (anything)?  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.  But here’s the tricky point: despite what popular pundits may think, virtual worlds and UGC don’t always blend well.  This isn’t peanut butter and chocolate, it’s caramel and fish.  Worse still, Lively launched without almost no tool-set for UGC, and despite that limitation, was immediately showing users popular rooms with sexually-oriented themes.  Flashback to the also-dead Sims Online: "UGC 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 things 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 completely own something little that it can’t control or monetize. See a mismatch? You can’t monetize and datamine the eyeballs if you can’t 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.]


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