Roadmap to the Virtual World » Blog Archive » Google Deadly.
"This is tragic and disappointing. Despite my negative review of Lively in it’s initial form, I am baffled. After spending at least two years in largely secret development (making 16,000 options for hair!) it was given only 4.5 months between announcement of launch and announcement of shut-down. Sure, it hasn’t taken off like a rocket yet, but it’s in beta, with some of the most important features yet to roll out. In my view, this is about more than just its performance to date; someone at Google either doesn’t believe in virtual worlds in the near term or perhaps more likely, didn’t believe that this particular product has a path to success.
If Google thinks that everything it rolls out has to set the world on fire in its first version and within 4.5 months, it won’t be succeeding with too many new products."
I think Sibley's hit the nail on the head with this post. While Lively itself didn't seem to have much going for it, four and a half months isn't much commitment.