As the Lively help center explains of the application: "You're about to embark on a chat experience in which you can communicate and express yourself using avatars in your very own space. Choose an avatar and use it to make friends and chat. Create rooms, decorate them to your liking, and make sure to invite your friends over."
Speaking to Gamasutra ahead of the announcement, Google's Mel Guymon, head of 3D operations for the company, explained that the project has been in development for over two and a half years, and that the goal was to create a "true persistent space" for social network users.
He suggested the application, which runs in a webpage plugin using elements of Emergent's Gamebryo game engine, could be compared to existing applications such as Second Life and Scenecaster, but does several things differently.
The application is closely integrated with social networks including Facebook and the OpenSocial standard, with a MySpace integration coming soon - Guymon explained that "...what we've done is got back end connectors that allow us to work directly with Facebook".
This means that, if a lively user is signed into Facebook, you don't have to sign in to Google to use the application, which is an approximately 10 megabyte download, and works with a PC that has either Windows XP and Vista installed.
Essentially, each person using the plugin will have their own avatar and virtual room which they can design and their friends can visit and chat in. According to Google's Guymon, people can leave you notes and add things to your room, and all of the rooms are connected.
Thus, you can click around within the plugin window and visit your friend's rooms, without leaving the webpage you were currently on - essentially creating a "continuous virtual world" to browse around.
The company has posted a trailer for the service on its official Google YouTube feed, as follows:
Detailing the project further, Guymon revealed to Gamasutra that the project had been in development for at least two and a half years, and that it constituted a "huge investment on the content side", with a number of in-house employees and more than 200 contractors helping to create the "couple of hundred thousand items" that make up the Lively object catalog.
Interestingly, monetization for the service has not yet been revealed - right now, all of the in-world objects are free, and Guymon said that the goal "is to get as many people using [Lively] as possible."
He noted that there were a lot of other products in this space, but "what's going to stand out for us is that the aesthetic bar is very high." A team headed by Jeff Matsuda, formerly at Warner Bros and the Batman cartoon series, worked on the aesthetic look from Google's Irvine office.
Guymon's closing thoughts? He believes that "Google is uniquely poised to validate this space for the mass market... this is not for geeks - this is for everyone."