1. Google Lively could be profitable -
   If 2,000 teachers paid $20 a month, Google would have $40,000 a month which should no doubt support the servers.  Using some of the ideas from my students on making money would no doubt help.
   
    
2. Google Lively is a Sunk Cost and walking away PROMISES zero returns for your investors
   
   No doubt there are a few things that would need to happen to make Lively a little better for educators, however, as Google looks at tightening costs and maximizing shareholder investment, I think they should take a long hard look at the mistakes made by the US automakers.
   
   Automakers based their R&D on what consumers wanted not on predictions of what they WOULD want.  Thus, the investment in sustainable "green" automotive transportation has not happened and typical R&D takes 7 years at least to make it to market. 
   
   Six months is hardly enough time to see the result of R&D as this is a Labs project.  Educators are typically slow to move, so expecting a return in such a short time isn't realistic.
   
   Walking away completely means that there is NO hope of recouping the investment made in lively.  None.  That should make stockholders mad.  Is Google so short term focused that they cannot see where the web is going?  Do they not know that elementary kids are playing Webkinz for 3 and four hours a day?
   
   Now, if customers were begging me to keep a service and creating things like the automatic room translator and how it could be used in classes, the customer is providing R&D for you.  We'll be your R&D.
   
   
3. Cost cutting alternatives other than a complete shut down
   What is the primary cost of Google Lively? 
   
   Is it R&D? Then tell staff members that there will be no improvement to lively for the next six months to see if enough users will come on board to warrant keeping it.  Empower users to be R&D.
   
   Is it server space and maintenance?  Then, limit each user to the creation of one room and certain user quota limitations for a free account and a premium account service to cover your costs.
   
   Is it cash return?  Then monetize the rooms themselves with Adsense.  (My students had some GREAT suggestions for monetizing avatars and objects)
   
   Is it inappropriate content?  Then, go to an Oracle Think.com model which will pay HUGE dividends in the educational community.
   
   
4. Remember the bridge effect
   
   When I was a market planner in the cell phone business, we evaluated some rural areas of New Mexico for cell phone towers. It was tough to get management to sign off on some of these areas because they had low traffic on the highways.
   
   We had to incorporate into our return on investment model two things: 
   
   a) the TYPE Of user who would travel those roads and
   b) the bridge or monopoly effect it would have on other markets like El Paso when we had all of that area covered with cell phone service.
   
   We fought for those towers and got them and went on to dominate in that market after we did so.  But the traditional ROI models didn't take into account what we knew would happen.
   
   Lively is a bridge service that will eventually pay dividends.  Now that more people have cell phones in new mexico, I have no doubt that those towers we put in in the early 1990's are very profitable, but it took a while to get critical mass.  3d world critical mass is going to take some time.
   
   3d worlds are just in their infancy and yes, Google wants to be king of search, but what happens when I search for things of a 3d nature?  How will they index those?  Are they just turning a blind eye to the future of virtual worlds?  How will these be indexed?
   
   Fine tuning the search capabilities in Lively will enable Google to be positioned to crawl other 3D worlds when the platforms become open.  To ignore this aspect of search is to ignore the future of their own search product which is their core business.
   
   
5. Long term investment and capital commitment
   
   Someone very close to me works in manufacturing.  During cost cutting, the removed all spending on capital improvements.  So, the $5000 investment that would save $100,000 was eliminated.  It is about keeping the main thing the main thing and they forgot that their business was manufacturing and making a profit.
   
   Yes, Google is about search, but they have also become a monopoly in many other areas of web apps.  Lively is a capital investment that is already made and has great potential. 
   
   I guess Google doesn't want to be the long tail in web apps, where Google Lively certainly is today, however, at some point, 3d services will move out of the long tail and Google will have to consider investing in buying out a company probably for far more than they would have paid if they had just kept lively.

"You've got a great service here, it is worth keeping.  We'll help you make it viable and pay for itself."

# posted by Vicki A. Davis @ 11:46 AM