Google has shut down Lively, a service where people log on to chat and explore 3D virtual spaces, after a few short months. The MBAs of Silicon Valley have a pat phrase for the arrival of a competitor on the scene: They say it "validates their space." What does it say, then, that Lively is gone? It means that Second Life, the best known of these unreal universes, is doomed, too.The notion of a metaverse has long fascinated geeks. The idea of "avatars" — three-dimensional representations of the self rendered in pixels, often fantastical or surreal in nature — wandering through a computer-generated environment has been explored in the science-fiction novels of Neal Stephenson, William Gibson, and Bruce Sterling, among others. The Matrix trilogy introduced the idea at multiplexes from coast to coast. And yet unreal worlds have never taken off in actual reality. Philip Rosedale, the creator of Second Life, once showed me screens at the headquarters of his company, Linden Lab, which monitored in real time the number of people logging in. They peaked at 50,000, the maximum simultaneous capacity of its servers. That's not a virtual world; that's a midsized town. Anecdotally, many of Second Life's users are there for virtual sex. (The company has banned gambling, so there's little other reason to go there.) The PG-rated Lively, censored by Google, did not even have that; its only draw was innocuous chat, with the occasional subversive attempt by users at raciness. No wonder that news organizations, drawn by the visual appeal of the service's 3D graphics, aren't writing stories about Second Life anymore. Reuters, at the height of the frenzy, opened up a bureau; its Second Life correspondent stopped filing copy since September, having left to write for a blog, and the wire service has not replaced him. The most recent noise to come out of Second Life has been an uproar over price hikes. Second Life users periodically hold colorful protests in the virtual world — probably the most entertaining thing that ever happens there — over this new rule or that new rule. They are likely to become more frequent, as Linden Lab, to survive, focuses on squeezing more revenue out of its existing customers, who pay the company "taxes" on their virtual real estate and convert real money into the company's imaginary currency, Linden dollars. Online 3D environments are not a fad; millions inhabit them for hours, sometimes days at a time. But they do so in networked videogames like World of Warcraft, where there's a clear purpose to being there — even if it's just having fun and wasting time. Second Life, Lively, and virtual worlds like them amount to glorified chat rooms, and while chatting is a fundamental human activity, it's hard for anyoen to make money on it.

Has Google figured out that Lively, its decidedly unsexy virtual world, is no fun? The company is letting videogame developers use Lively as the basis for their games. Forget about rebuilding popular racy fare like Grand Theft Auto on Lively's platform, though — Google's chaste restrictions on sexual content will apply to derivative works. [Gamesindustry.biz]

With support for Mac users, a new Facebook widget and an instant messaging application, There.com is hoping to breathe some life into its 3D virtual world which has gone largely unnoticed for years since its launch in 2003. If publicity could support a business model, Second Life might not be the largely empty libertarian paradise it is today. Google's new entry Lively, on the other hand, has also struggled with adopting users — possibly because it refuses to cater to any interests that aren't G-rated. The question remains as to whether any 3D simulacrum that isn't explicitly for gaming has much attraction to all but introverted shut-ins and avant kinksters. With family-friendly rules to keep the virtual pimps and hustlers off the polygonal streets, There.com might just succeed in finally reaching a broadening demographic: Parents so scared, they'd rather keep their teens cooped up at home and nervously trying to interact with crushes online when not reading the Twilight series of chaste teen romance novels featuring abstinent vampires or getting dragged to dad's Promise Keepers meetings.

Lively, Google's entry into the 3D-avatar chat market, has been neutered before its time, writes the Economist. But in the midst of the starchy business newspaper's tour of the service, its editors hit on the solution: "Although some popular rooms—“Love Sweet Love” and “Sexy Babes Club”—have had thousands of visitors, the number quickly drops into the double digits further down the list." It's obvious, yes? Even if your terms of service beat sex into submission, users will find their own way to slip it back in. They're feeling lucky, even if Lively's product managers aren't. So why not embrace what a truly open sex market, powered by Google, could look like?An index of commercial sex. Within a few months of Lively permitting fantasy prostitution, the data gleaned from what kinds of sex, with what genders of avatars, and for how much would start to stack up server-side. Wouldn't this data, properly analyzed, be a boon to Internet-based escorts who use AdWords to promote their business? A clean, well-lit place to cruise. Virtual worlds run on the same principal as Vegas: Build something friendly yet sexy, and let the users pretend they're not there to get turned on. Full-on brothels and strip clubs may not even result in much feigned sexual activity within Lively, but they will give users a specific place to bring their sex talk — one that other users can avoid if they choose. "But what about the children?" They already have the kids-only virtual world Club Penguin. And MySpace chat. If they have access to Craigslist, the kids already know what prostitution looks like.