Launched in early July of 2008, Google has decided to terminate the project at the end of December. It brings to an end what will have been a mostly unremarkable four and a half month run for a project that never seemed to gain much momentum.

The announcement was posted both on the Official Google Blog as well as Lively's homepage, leaving little doubt that the project won't be resurrected.

The Lively homepage get straight to the point: "After careful consideration, we have decided to shut down Lively."

The page also highlights some of the ways that the relatively small amount of users has been using the 3D environment, referencing YouTube videos that tell stories of avatars and some of the room construction that took place.

But on December 31, Lively users will no longer be able to interact in the environment.

"We will shut down Lively on December 31, 2008," states the Web page. "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."

The Official Google Blog also has a brief eulogy of the project, noting that not every project the search engine giant takes on is not going to pan out.

"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," writes the Lively team on the blog. "But we've also always accepted that when you take these kinds of risks not every bet is going to pay off."

Instead, Google will use the resources that had been dedicated to Lively in order to continue to strengthen their bread and butter: search and ads.

"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," states the blog.

Fortunately for the people working on the Lively project, they won't be laid off in these tough economic times. Instead, the engineers will be rededicated to other teams to -- presumably -- work on Google's core business.