bbc.co.uk Navigation

Maggie Shiels

Google catches downsizing fever

  • Maggie Shiels
  • 20 Nov 08, 09:45 GMT

You know things are getting bad when the often thought of mighty Google starts acting like most Silicon Valley companies amid the global economic crisis that is rippling throughout the country.

For weeks the advice being doled out to starts ups has been to hunker down, conserve cash and concentrate on the core business. But how worrying is that Google is heeding that same advice by pulling the plug on Lively, a product which was launched less than five months ago as a rival to the virtual world Second Life?

In a blog posting headlined "Lively no more", the company said "Despite all the virtual high fives and creative rooms everyone has enjoyed in the last four and a half months, we've decided to shut Lively down at the end of the year."

Google said it was a "tough decision" but that it wanted to "ensure we prioritize our resources and focus more on our core search, ads and apps business."

Many outside and within the company may well agree with that sentiment given that more than three quarters are under water with their share price. A year ago it was over the $700 mark and this month it hit historic lows of under $300.

There have been plenty of commentators and analysts calling for Google to return to its roots and stop messing about with distracting projects like geo thermal energy, space travel and the like.

Of course the company is in a lose lose situation here. There has to be kudos given for having the guts to axe something that just wasn't working yet it also makes one wonder what is next?

Comments

  • Comment number 1.

    I feel that this post is a little spurious and is looking for things that just aren't there. Lively didn't make so much as a scratch in the MMO world, so Google's decision to scrap the system was more about good business sense than having guts. Would you continuously throw money, time, effort and resources to something that just wasn't working, irrespective of the world or national economy?

    Your kudos should go to those companies who continue to put money into R&D and innovation during times of economic hardship. Google will continue to innovate - and good luck to them - but things like this are to be expected from any major company (like Microsoft dropping OneCare).

  • Comment number 2.

    Google was involved in space travel? Shurely shome mishtake?

    What was this project called -- Google Cadet (BETA), per chance?

  • Comment number 3.

    I'm not sure we'll all suffer too much from another place for people with no lives to descend to.

  • Comment number 4.

    this is a sensible decision, Lively never took off and it has very little which Google can leverage. This is the kind of decision which all companies have to take irrespective of hard times or other.

    To Scotbot, all the "Cool" corp entities are involved in space travel, Jeff Bezos of Amazon has a Rocket project, the MS dude has his another, Branson his funny space plane. It seems to be the current way to spend your Saturday if you are a billionaire as opposed to spending time in a potting shed or at Ikea.

  • Comment number 5.

    To Scotbot, all the "Cool" corp entities are involved in space travel, Jeff Bezos of Amazon has a Rocket project, the MS dude has his another, Branson his funny space plane.

    -------------

    Difference is the frist two of those are personally funded, not corporate. and Branson practically personally owns Virgin so thats not too far either.



    And I agree with the posters, scrapping Lively was more sensible business than anything else. Even though previously Google would have carried on regardless, this is more of Google being normal instead of panicing.

  • Comment number 6.

    The economic climate for search advertising is cooling. Companies are reluctant to pay for the adwords at the current rate. I suspect that online ad revenue could drop by 18 percent or more based on ad metrics from the various ad networks and social media sites.

    Google could have a revenue down tick of 5 percent which would translate to a cut on their stock value by one third in Q1 2009.

    Why? Because unsold impressions for display advertising have skyrocketed to above 65 percent in October, at a time when it should be the hottest advertising period (Xmas).

  • Comment number 7.

    V40man,

    Arent paul allen (the microsoft fella) and Branson doing the same thing?

    Thought RB was working with the SpaceshipOne people who received investment from Allen. could be wrong thougth so dont quote me or anything.

  • Comment number 8.

    Maggie:
    it is sad, that google catches the downsizing fever, but it is part of life...they will get over it .

 

The BBC is not responsible for the content of external internet sites

BBC.co.uk