Virtual worlds ad agency Millions of Us and immersive spaces company Rivers Run Red have both announced that they are participants in Google's Preferred Developer Program for the search giant's recently revealed Lively virtual world.

Lively by Google is a product that lets people create and share persistent, virtual spaces on the web. As a lightweight application fully integrated with the web, Lively rooms can be embedded on websites and blogs all over the web with just a snippet of code. Lively users can also stream their own content, such as videos and photos, directly into their rooms.

In Lively, users can create, customize, and share persistent spaces, embedding them onto websites, social networks, and blogs with a snippet of code.

Millions of Us has partnered with the National Geographic Channel to deliver branded content for the network's L.A. Hard Hats series. The television show follows the development and construction of EVO, a 23-story eco-friendly high rise structure, from the perspective of several tradesmen.

As part of its agreement, Millions of Us will set up a virtual building in Lively's National Geographic center. The skyscraper will be under intense construction and will evolve with the TV series' episodes. Visitors can explore the building, its features, and the complex work required to build the tower.

Said Millions of Us vice president of business development Ted Tagami: "Facilitating NGC's entry as the first brand in Lively by Google is a landmark achievement for our company, and our objective going forward is to help seamlessly integrate additional brands into this very promising online space. Through customized 3D online spaces and avatar-based socialization, our clients will benefit from the earliest possible access to our rooms built in Lively by Google."

Rivers Run Red wasn't specific about what branded content it will be providing for Lively, but the company states that it has a new design team in place to meet the high level of demand for companies looking to incorporate the new virtual world into their digital strategies. So far, the team has created a demo 3D space in Lively called "Avalon" for visitors to explore.

Said Rivers Run Red CEO Justin Bovington: “In the last five years, we have encountered high demand from companies looking to provide 3D experiences for their communities on the web. Lively by Google is a promising solution for web-based 3D environments and will only help to make the prospect of the 3D Web a reality.”

Google's recently launched virtual world Lively isn't intended to compete with Second Life, but is instead seeking to attract social network users away from Facebook and MySpace, according to an analysis piece published by technology research and advisory firm Gartner.

The group described Lively as inhabiting the low end spectrum of virtual world offerings, in between social networking sites and social networking virtual worlds such as Habbo Hotel and Club Penguin. Like IMVU, which shares Lively's virtual rooms metaphor, Google's service offers social networking with a visual flavor, resembling graphical instant messaging clients more than it does a full-blown virtual worlds.

Gartner also brought up several criticisms for Lively, pointing out limited avatar customization options and lacking user-created content development. In addition, the virtual world does not offer any in-world currency or an economy, which could eventually "limit the opportunities for engagement. "

Said Gartner analyst and vice president Steve Prentice in his analysis: "We believe this could mark the start of a transition to a new kind of three-dimensional social Web. Nevertheless, it is too early to predict whether Lively will gain market traction. The ease of integration with social networks would appear to make access easy, but this sector focuses as much on people and communities as it does on technology."

He continued: "To succeed, Lively must build a substantial and loyal user base by enticing millions of users (and their friends) away from their current haunts. That will pose challenges even for a company with Google's reputation and resources."

Google is shutting down its Lively embeddable virtual world just about four months after it was first announced, aiming to prioritize its core business.

Revealed in July, Google's Lively allows users to embed virtual rooms inside web pages, decorate them with graphic objects, and create avatars to interact with friends inside the rooms. "We launched Lively in Google Labs because we wanted users to be able to interact with their friends and express themselves online in new ways," reads a post on Google's official blog.

A brief statement on the Lively homepage states simply: "After careful consideration, we have decided to shut down Lively."

"We will shut down Lively on December 31, 2008. Embedded rooms in blogs and other web pages will continue to show an image, but users will no longer be able to enter Lively rooms and interact."

Originally, the service had also incorporated a planned API that would eventually allow users to embed games into Lively.

"Google has always been supportive of this kind of experimentation because we believe it's the best way to create groundbreaking products that make a difference to people's lives," says the post on Google's blog.

"But we've also always accepted that when you take these kinds of risks not every bet is going to pay off. That's why, 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."

According to Google, all of the project's staff will be relocated to other projects. The move is apparently motivated by the company's need to "prioritize our resources and focus more on our core search, ads and apps business."

[The preceding article by Leigh Alexander originally appeared on Worlds in Motion sister site Gamasutra.]