Google on Tuesday rolled out a challenge to virtual world giant Second Life with free software that lets people create their own online 3D worlds that can be embedded on websites and melded with other online functions.

Lively by Google lets people place virtual "rooms" on websites, customize "avatars" to be online proxies, and decorate their fantasy worlds with photos or streaming videos from YouTube, Picasa or other online sources.

The offering is a challenge to Second Life and other animated online worlds that require memberships and don't let people take their creations elsewhere on the Internet.

"I'm wondering if this isn't a bridge too far," analyst Rob Enderle of Enderle Group said of Google expanding into virtual worlds.

"They are facing an awful lot of competition. It could be Google is anticipating the next wave on the Internet. We are not in the place where 3D is the way to render web pages, but we are heading there."

With Lively, a user can adapt his personal online realm to his own imagination. Examples shown include hip flats, sprawling ranches, and rooftops backed by cityscapes.

Lively users can invite friends' avatars over for visits by sending them online room addresses via email or instant messages, according to Google engineering manager Niniane Wang.

"If you enter a Lively room embedded on your favorite blog or website, you can immediately get a sense of the room creator's interests, just by looking at the furniture and environment they chose," Wang wrote in an online posting.

"You can also express your own personality by customizing your avatar's look, showing people who you are without having to say a word. Of course, you can chat with each other, and you can also interact through animated actions."

Lively code is available at www.lively.com and an application has been customized for the social-networking website Facebook.