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One of the good things about Google is that they try stuff. They can afford to try out projects, and don't stick with what isn't working. Well, it appears that their Lively virtual environment chat-rooms haven't worked out. Google will be shuttering the Lively service on 31 December 2008, less than six months after launching.

Lively's Web-site -- launched to the public on July 9 this year -- will remain up, and the images of the rooms preserved, but the rooms themselves will no longer be active. This seems to also end Google's plans to leverage Lively as a games-platform. It isn't clear at this point what it means for Google's partner, X-Ray Kid Studios who has been working on Lively for the last two years, and was increasingly positioned as Google's games division.

China's State Administration of Taxation recently imposed a 20 percent income tax rate on profits made from virtual currency and virtual items, sparking price increases for virtual goods. While this tax rate (if actually enforced) clearly impacts the virtual space, it also affects transactions happening outside of MMO servers and virtual world grids. The taxation policy could ultimately extend to the virtual currencies linked to the largest IM providers in China such as Tencent, drastically increasing the percentage of the population affected by the new laws. Despite this, the positive benefits of eliminating gray and black markets for virtual items and currency may outweigh the drawbacks for gamers and users of the various digital services in China.

Questions remain about what will and will not be taxed in the virtual space, but it's clear that individuals who gain virtual income are expected to declare their profits and pay taxes on this, and do so within seven days of having earned the profit, according to Shanghai Daily.Taxpayers who can provide proof of the value of this property or the value of the transaction are taxed at 20 percent on their profits, while those who cannot provide sufficient verification are taxed at three percent of the total transaction value. But how many people are affected by this new system?

Among the people President-elect Barack Obama has appointed to his FCC agency review transition team are Net Neutrality advocates Kevin Werbach, assistant professor of legal studies and business ethics at Wharton, and Susan Crawford from the University of Michigan, who teaches communications and internet law. Werbach, as it turns out, is a World of Warcraft player, according to Wagner James Au at GigaOM.

Werbach has written about MMOs on his blog (back in 2006), that games "provide an incentive for people to develop new software and ideas for collaborative production. Many of those ideas will translate to other group activities, including those within the business world. I think MMOGs will be, at minimum, a significant testbed for these new technologies, because users see a direct benefit and are willing to experiment with new things." Werbach plays in two WoW guilds, one started by a friend, and the other is comprised of academics whose interests or work focus on virtual worlds.

While Werbach is more of a traditional MMO gamer, Crawford is a fan of Second Life, judging by what she's written on the virtual world in the past on her blog. At the very least, it's a positive sign that individuals connected with the FCC and its policies really understand how people are using technology to socialize, collaborate, and play.

October metrics for Linden Lab's virtual environment, Second Life are not yet formally available, but Lab CFO John Zdanowski wound up giving out a link to the information in advance, so we have the figures to work with. September was not a good month by these metrics, and we were interested to see how October panned out.

Your key takeaways for October are a continuing plunge in premium accounts, and a reduction in overall economic activity. User hours, however were up. A more detailed summary follows after the jump.

The torrent of new users coming into Second Life is slowing, with today's signup rates now merely double the typical rates, and expected to close in the vicinity of 22,000 new signups for the day. This is all in the wake of the widespread run of a reprinted and regurgitated piece about the divorce of a UK couple.

The original piece has run in hundreds of print and online outlets since the story broke last week. Even tiny local tabloids in small rural towns with little or no Internet access have pushed the story, and by and large readers responded with enthusiasm.

In Scotland On Sunday, Teresa Hunter writes, "Last week's story about the divorce of a couple who met on Second Life must have been the kiss of death for the online virtual world."

When it comes to virtual worlds, Massively's main focus to date has clearly been on Second Life, but we're also interested in some of the other choices that are becoming available to residents in virtual spaces. Blue Mars from Avatar Reality is one that's caught our eye -- it's a sci-fi themed virtual world, set on a terraformed Mars in the year 2177 AD. The potential is there to have some stunning visuals, as Blue Mars is built on CryEngine2, best known for giving Crysis its look.

The official Avatar Reality site lists a beta release for the end of 2008, but they've told Eurogamer that Blue Mars enters beta in January 2009. "The first-time developer expects this to last for around three months, before the full game launches in April," Eurogamer's Rob Purchese reports.

An old saying goes "There's no such thing as bad press, so long as they spell your name right" which is normally attributed to P.T.Barnum, but there are a few quotes attributed to Barnum that weren't his, so we'll take that with a grain of salt. Right now, it seems more proper to say "There's no such thing as bad press, so long as there's a whiff of salaciousness about it."

The mainstream media's spent the last few days spreading around a story about a UK couple who are getting a divorce because the husband apparently won't stop fooling around online. Maybe she was taking it too seriously. Maybe he wasn't taking it seriously enough. Either way, it is serious enough now.

Now, much of the actual reporting about the couple, their situation, and Second Life (their most recent haunt) is pretty much utter tripe. Badly researched, poorly informed twaddle, really. But that doesn't matter, because it is causing a bit of a veritable torrent of new signups to Linden Lab's virtual world.

Much has been made of a statement recently by Linden Lab's new CEO, Mark Kingdon, that 'Premium subscriptions are immaterial in our overall business.' You see, in a sense that's pretty much spot-on. Unless a premium account owns more than 512 square metres of the Linden Estate (colloquially known as the Second Life Mainland), that account is either only very small revenue for the Lab, or actually represents an ongoing cost to them.

Linden Lab's CFO, John Zdanowski said, 'The revenue we generate from premium subscriptions is largely offset by the stipends we pay out to these account holders, so this decline doesn't have a material impact on our business.'

Either you're on an older premium account with a 500 Linden Dollar per week stipend grandfathered in, or you're on a newer premium account with 300/week. There's also a choice of plans, ranging from monthly to annual. Let's take a look at the relative values.

Linden Lab's CFO, John Zdanowski is better known to Second Life users as Zee Linden, though we think of him more as a Zeno, after Zeno of Elea, who baffled, annoyed and amused pre-Socratic thinkers with a set of seeming paradoxes, many of which revolved around the adjustment of frames of reference and measurement -- and, whatever their original intention -- amply display the follies that arise from doing so.

You can pick up all of that from yesterday's Q3 2008 world metrics from Zdanowski, entitled 'Q3 closed on a high note with an unusually strong September'. You might want to check September's published figures against that report, and see if you agree with 'unusually strong'.

Since the announcement of Openspaces 3.0 product pricing for Second Life (and the subsequent update to a reduced specification Openspaces 4.0 product), Linden Lab has seen its virtual world shrink for the first time on record with a net loss of 24.05 million square metres (a little less than 6,000 acres).

That's a net loss, so however many new simulators have been brought online since the beginning of the month, those gains have been canceled out by customers dumping land, and an additional 24 million square metres have been lost. During its Q2 2008 report, Linden Lab identified the (now deprecated) Openspaces 2.0 product as a primary growth driver.

It isn't presently clear how long this downward trend will last. So far, those net losses amount to just 2.8% of the total Openspaces 2.0 product that are actually out there on the Second Life grid. Many owners, however, have said that they intend to hang on to their void simulators for as long as possible, and dump them just before the jump to Openspaces 4.0 (or Homesteads 1.0) becomes mandatory. It remains to be seen if the Lab can shake off the chill and push those figures up in the latter half of the month.

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	Are you a part of the most widely-known collaborative virtual environment or keeping a close eye on it? Massively's Second Life coverage keeps you in the loop.

You could be forgiven for having forgotten about the Linden Prize already, given that it's been four months since it was announced by Mitch Kapor. Nevertheless, we weren't entirely surprised to see Linden Lab reannounce it, this time with some actual details, terms and conditions.

The fundamentals of the prize seem to remain unchanged. It is US$10,000 worth of Linden Dollars for (as Kapor put it) 'superlative achievement exemplifying the mission "elevating the human condition" through using Second Life.'

The terms and conditions now make eligibility somewhat more precise.

Whirled, an ambitious web/virtual world hybrid from Three Rings, launched into Beta early this year. We were incredibly impressed with the project even back then, bouncing pieces of tofu or not. From there the project has only grown by leaps and bounds, and word now comes down that Whirled has officially launched! The interactive web environment now offers a microtransactional system where you can make money directly from your content. You can make or play games, chat with a wide array of players, or just enjoy the numerous and creative rooms players have generated over the last eight months.

We had the pleasure of speaking with Mr. Daniel James about the new vision of Whirled, and you'll be able to read that discussion tomorrow. For the time being, go check out Venturebeat's analysis of the project or (if you're so inclined) read upon the full press release below the cut. PS: If you play, we recommend Brawler Whirled or Corpse Craft. They're both fantastic!

Linden Lab's new CEO, Mark Kingdon, has announced a new land product for Second Life, based on all the feedback, and vociferous protestation that all but exploded following the original announcement. Reactions to the new announcement are still a bit mixed, with many thinking that this is the announcement that should have taken place originally. After all, Linden Lab already had all of the information prior to the flood of feedback that they received.

Nevertheless, the end result is that void simulators will be available in two flavors: the Openspaces product (now adjusted substantially) and the new Homesteads product. There's a knowledge-base article enumerating the changes, but we'll break it down for you.

The context in which the Second Life issue of the void/openspaces price-rise exists is a rather complex one, going all the way back to 2006. So, in order to get the whole issue in perspective, we've rounded up the history of void simulators, costs and conditions, all the way back to the beginning.

And it is a far more interesting progression of events than you might think. On with the show.

North Carolina State University's Dr Mitzi M. Montoya and Dr. Anne P. Massey, Dean's Research Professor of Information Systems at Indiana University have developed a system for measuring how 'real' virtual environments are. Rather amusingly it is called the "PVP scale" (for Perceived Virtual Presence). Yes, we know the acronym is a rather amusing one, and no this isn't a joke.

The interesting thing is what is being measured. 'This is an important issue,' Montoya says, 'because we believe that if users feel they are 'present' in the virtual world, they will collaborate better with other members of their team – and the more effective the virtual world will be as a setting for research and development or other collaborative enterprises.'

Well, we can't argue with that, really. The interesting thing is that what makes a virtual environment more 'real' and effective according to Montoya is immersion.