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Launched in July from Google Labs, Lively hoped to provide the search giant's answer to Linden Lab's popular creation Second Life.

But the real-time virtual world, complete with build-your-own avatars, chatrooms and three-dimensional graphics, failed to make a significant splash with the online community.

Alex Burmaster, communications director of Nieslen Online, noted: "Ever since its inception, the beta site has been too niche to be tracked by our research. This, in itself, probably suggests it has failed to connect with as many people as Google would have wished."

A Google spokesman said the idea behind Lively was to enable users to interact with their friends and express themselves online in new ways.

He added: "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. 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.

"It has been a tough decision, but we want to ensure that we prioritise our resources and focus more on our core search, ads and apps business."

Lively.com will be discontinued at the end of December. Everyone involved with the project will be moved to other Google teams and no job losses are expected.