Is that Google (NASDAQ:GOOG), flashing a little colorful personality?

Yesterday's launch of Lively seems a bit out of character for the world's leading search engine. Offering users the ability to create avatars, design rooms, and virtually chat with other Lively members is cool and all, but in the butchered words of David Byrne, this is not my beautiful Google.

After all, Big G is the company that painfully measures every word it tosses onto its homepage. Even busier Google landing pages like iGoogle or Google News have a sense of order within the clutter. Now Lively steps into the picture, giving netizens with a social bent the ability to seek 3-D shelter in free digs, complete with televisions streaming their favorite YouTube videos.

Call it "Third Life"?
This isn't exactly Second Life, with its commercial or hedonistic detours. Lively lacks the playful diversions that Disney (NYSE:DIS) and Mattel (NYSE:MAT) code into their own kid-friendly hubs. Lively is barely a kissing cousin to IAC's (NASDAQ:IACI) Zwinky, but it's getting warm.

Lively may be a toned-down version of established virtual worlds, but its portability sets it apart from the pack. Lively users can strike up conversations with friends in customized rooms within, but the site also lets users embed those virtual rooms into blogs and social networks.

Is Google the first to give legs to virtual worlds? No. Is Google's girth substantial enough to be a difference-maker? Sure.

Google isn't a social-networking rookie. Its Orkut social networking site is no Facebook, nor News Corp.'s (NYSE:NWS) MySpace, but it's a legitimate contender, especially in certain foreign markets. YouTube doesn't offer the same kind of profile-page customization as social networking sites, but isn't it just a matter of time before the site allows its users to place Lively rooms within user channel pages?

I see green, people
It also doesn't take much to fathom the countless ways that Google -- the Web's leader in monetization -- can turn this into a real moneymaker. And unlike other virtual worlds, which limit their rolls by charging monthly subscription fees or enticing users to purchase premium items, Lively can make money without forcing its young crowd to crack open daddy's billfold.

Just picture how Lively could generate greenery in a year or two:

  • Room owners could give Google permission to serve up video ads within their YouTube streams, cutting them in on a piece of the action. More to the point, Google could take a page out of in-game video game advertising and allow users to insert blank billboards for Google's display ads. Google is a master when it comes to viral marketing. Just check out Google AdSense or the YouTube Partners program. Revenue-sharing is the surefire way to get users to actively promote their rooms, because vanity can only take you so far.
  • Instead of charging users for items, Google can charge sponsors to offer branded virtual merchandise.
  • Buyers of real-world goods -- like CDs, DVDs, or video games -- can receive codes to unlock related Lively freebies.
  • Record labels like Warner Music Group (NYSE:WMG) can pay to have their upstart artists promoted, encouraging Lively users to serve as tastemakers and deliver streamed samples in their rooms in exchange for free downloads. Talk about reinventing the street-team concept!

We're really just scratching the surface here. Then again, you have to start somewhere.

Step up, Google, but do step Lively.

Other virtual worlds, covered Foolishly: