Going for the Myspace angle seems pretty doomed, too. Myspace's "ooh shiny" is long gone, everyone's currently on Facebook.
But in a few years we'll be all looking at some other social network. These sites are ephemeral (right word?), and basing your business plan on 'em is stupid.
Lively is going to fight with IMVU and the other 403 startup companies doing the same fucking thing. And sucking up tons of venture capital (really, read the Virtual Worlds Weekly I'm sure most of you get spammed in your inbox. At least 100 million in funding is sucked into virtual worlds every week)
None of them, none of them COMBINED, comes close to
SL's feature set.