Google says there's to be no sex in Lively, and it won't let your avatars get naked or copulate. But a look at the service's most popular "rooms" tells you where Lively's head is at. Key words like "sex room" and "adult chat" dominate the listings. In the non-sex themed rooms, female avatars get approached and "kissed" without their consent.
We do think there's something magical about 3D chat and the sense of intimacy it imparts. Google was smart to set up a beachhead in the virtual worlds space, and we're not yet ready to completely write off Second Life either. But Second Life was never able to quite crack the walnut of virtual worlds advertising. And unless Google has some tricks up its sleeves, it's not going to be able to do it, either.