Once thought to be its answer to virtual worlds like Second Life, Google'slaunched this summer to much fanfare.
Lively was Web-based and allowed anyone to set up virtual spaces, such as rooms, that could be embedded onto blogs or Facebook pages.
But the project never picked up much steam.
"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 on its official blog Wednesday evening. "It has been a tough decision, but we want to ensure that we prioritize our resources and focus more on our core search, ads and apps business."
The post said that those who were working on the Lively team would be reassigned to other areas within Google, suggesting that the move does not mean layoffs.
Google also said that because the project is being shut completely down, it is encouraging "all Lively users to capture your hard work by taking videos and screenshots of your rooms."
Disclaimer: My wife works at Second Life publisher Linden Lab.