Amazon, Toysrus.com Launch Kids Learning Store

Amazon.com (Nasdaq: AMZN) and Toysrus.com extended their year-old brick-and-click marriage Monday, launching a co-branded children's learning site, Imaginarium.com.

The site, which features educational toys and games for children, along with parent and teacher recommendations, is the third online effort the two companies have taken on together. Amazon and Toysrus.com first linked up in August 2000, when Amazon took over fulfillment for Toysrus.com.

In May of this year, Amazon took over operation of Babiesrus.com, which had been run independently by Toysrus.com. Both sites are now among the most popular in their respective markets.

Filling a Gap

The Imaginarium.com site extends onto the Web a brand that Toysrus.com parent company Toys 'R' Us (NYSE: TOY) acquired in 1999. Toys 'R' Us said it plans to add Imaginarium sections to hundreds of its stores and to extend the existing chain of 42 standalone stores to 200 by next year, expanding across the United States and into Canada.

Toysrus.com said the Web site fills a gap that will enable the Toysrus.com and Amazon partnership to provide seamless toy shopping to parents of all ages.

"The store will also be a convenient step for parents who already shop our Babiesrus.com store, just as their children reach toddler age," Toysrus.com chief executive officer John Barbour said.

Division of Labor

In addition to Amazon's customer interface and its consumer and editorial review features, Imaginarium.com will feature the ability to search for gifts based on the learning skills being taught.

The co-branded site will be run under the 10-year strategic agreement between Amazon and Toysrus.com.

Imaginarium will handle merchandising, planning, buying and inventory management, while Amazon will oversee the online shopping experience, site development, order fulfillment and customer service. Amazon also will house Imaginarium.com inventory in its distribution centers.

"Imaginarium.com is a great complement to our already strong Amazon.com Kids platform of Toysrus.com, Babiesrus.com and our current books, music and video offerings," said Jorrit Van der Meulen, general manager of Amazon.com Kids.

Model Behavior

Analysts have held up the Amazon/Toysrus.com partnership as an example of how best to leverage the Web and traditional retail .

Since it was announced, Amazon also has taken on online order fulfillment for Borders.com, the Web business of retail bookseller Borders (NYSE: BGP).

While refusing to confirm rumors and published reports linking Amazon with a host of retailers, including Wal-Mart and Best Buy, Amazon chief executive officer Jeff Bezos repeatedly has said the e-tailer is open to additional partnerships like the Toysrus.com deal .