Christian Renaud's Blog

Lively heads for the giraffe graveyard

Google announced yesterday on their blog that they are shuttering the Lively project.  This is unfortunate for multiple reasons:

1) Google was the first real major player to have a virtual world platform launch, albeit social avatar-chat centric, which in many ways validated the market space to external skeptics.  Terminating the Lively project will reinforce the views of the perpetual doubters due to the press it will receive.  Very public failure.

2) Google had a unique opportunity to tie in Lively with a number of it's other products (GTalk, Chrome, the App suite) and never did so.  This would have made a very strong market position, allowing them to exploit existing GMail/GTalk contacts (as Vivaty does in Facebook) and embed GDocs into collaborative rooms.  No other virtual world company has the horizontal footprint to carry this off, and Google had the resources, the positions staked out on the battlefield, and still miscarried. 

This reminds me of the Persian King Darius III at the battle of Issus against Alexander the Great.  Darius had the overwhelming numbers (in this case, Googles vaunted market capitalization and resources) and somehow still lost to this scrappy upstart (scrappier startups).  It's still to be determined who the Alexander will be in this analogy.

3) There were a number of secondary companies who invested in Lively as a platform for value (Rivers Run Red comes immediately to mind) who are also going to be impacted by the closure.  Startups cannot afford to partner with multiple large company platforms due to the engineering commitment involved. 

At the end of the day, this isn't something as straightforward as Google choosing to 'prioritize our resources and focus more on our core search, ads and apps business', as said in the blog.  The entire Lively team was less than a dozen people in a company with 17,000 employees. They have more than a dozen people somewhere in the depths of their finance department who do nothing but analyze the costs of Google trade show tchockies. Cough, Bullshit, Cough.

What this proves to me is that Google is just as political and functionally inert as other large companies, their propaganda aside about being a fluid startup at heart.  Vibrant large companies encourage risk taking and have longer attention spans than 6 months for new products.  It isn't a matter of Google 'not believing in the 3D Internet/Avatar Chat market', as large companies don't believe ANYTHING other than the composite opinions of a few leaders, so you can't say with certainty that there was a single corporate position on Lively.  What is certain is that the team there didn't achieve the level of support from the rest of the organization that would have insured it's success in this challenging market.  Unfortunate, and yet another reason to sell GOOG if you hold it.

Grab the fiddles boys, I see smoke.......

I have changed my mind. 

I no longer have any concern and temporal angst about the government's totally misguided socialization of the financial system, and (soon to be) domestic automobile manufacturers.  It's just fine that General Motors has a market capitalization of $1.7B as of today, which is less than twice that of just the new line of revolving debt extended to the failing U.S. big-box electronics retailer Circuit City.  I suspect the airlines are queuing up salivating at the opportunity to 'tap the TARP' as well.

The fact that the government precipitated the crisis by inconsistent, ham-handed, and misguided regulation of short-selling financial stocks, and not the excesses of the corporations they blame, no longer ruffles my feathers. They spent the previous decade fumbling, bumbling, and overall disrupting the energy sector, at a federal and at a state level (by their own admission), and now they are using the same playbook on the financial sector.

The government will print more fiat money, further devaluing the USD at a time that we should be shoring up reserves in anticipation of the entitlement crush that the economy is moving into as the baby-boomers hit social security, medicare and medicaid.  They will hemorrhage money in colonial wars abroad, they will subsidize and effectively de-privatize the industries that we spent the last thirty years privatizing, following the lead provided by fine socialist icons like Christina Kirchner, who is currently in the process of de-privatizing private retirement funds so the Argentinian government can raid those like they did the state-operated retirement funds.

In short, they will throw taxpayer money at poorly and partially-regulated industries like the automobile, airline and financial sectors in the hopes that their largess will somehow reform these industries into more capital efficient, productive members of society.  If this wasn't a punchline stolen directly from Atlas Shrugged, it would be almost funny.

And the root cause of this all, according to government, was 'not enough government oversight'. Sure, we need more government, right?

Per a great article written by Veronique de Rugy in the December 2008 issue of Reason Magazine:

"Real federal spending increased from $774 billion in 1968 to $2.5 trillion in 2008- a 225 percent increase- and federal spending per household grew from $11,800 to roughly $21,000 over that period, in constant dollars."

Because if you are a lawmaker, are you going to remove laws or create new laws?  Are you going to shrink the government and downsize your own job, or grow your empire?  Take a guess.

"Look no further than your morning routine.  The federal government has put its imprimatur on the mattress on your bed (through the Consumer Product Safety Commission). The Federal Communications Commission regulates the transmission and content of your favorite morning show.  The Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA), as well as the Commodity Futures Trading Commission, regulate the coffee you drink and the sugar you add to it.  The USDA regulates the milk you pour in the coffee, as well as the cheese, butter, and other dairy products you might eat for breakfast.  And the FDA has its say about the shampoo, soap, and toothpaste you use with water that's regulated by the Environmental Protection Agency." (also from Ms. de Rugy's article)

The reason I am reconciled to this is that there is no chance whatsoever that it is sustainable.  The government cannot continue to party all night long and never pay the bar tab.  It will, during the next 20-30 years, suffocate all industry and taxpayers, and ultimately collapse into itself.

We'll then have the opportunity to reinvent this great nation from the rubble without all of the expensive and invasive entitlement and nanny-state laws.  Now where did I put the resin for my bow.....

The time of his life

If you read this blog, you know that I am a big fan of Thomas Jefferson and his governmental policies.  Specifically, that the best government is as little government as possible and that most bad government comes from too much.  It's for this reason that I am strongly against the concept of a default 'two party system' in the United States, and believe that the United States government is increasingly a duopoly that colludes to keep out any viable third party(ies) from the equation.

So, when my seven year old daughter came home on Thursday and said that they were going to stage a mock U.S. presidential vote in her elementary school, I asked her who she was going to vote for.  She said they only had two choices, Obama or McCain.  I sat with her for the better part of an hour explaining to her that she could vote for whomever she liked for president, and not just Obama or McCain.

Needless to say, when Friday came around and she returned home, she had her 'I Voted' sticker proudly on her chest.  She said that she had objected to the principal of her school but the principal had admonished her that she HAD to vote for one of the two-party candidates.  I will be following up with her (the principal) later, rest assured.

Foiled in my attempt to de-program my child from the overt political conditioning, I sweetly asked her who she voted for....

"John McCain"
"Why did you vote for Mr. McCain, honey?", I asked
"Because he is really old, and I want him to have the time of his life before he dies", she replied.