Disney’s Buena Vista Acquires Stake in Toysmart.com

In a move that will distribute “good toys” across its line of animated Internet properties, the Walt Disney Company’s Buena Vista Internet Group (BVIG) announced Wednesday that it has acquired a controlling interest in toysmart.com.

Financial considerations were not disclosed, but some observers believe that BVIG has agreed to pay toysmart.com $20 million (US$) and will provide an additional $25 million in marketing support. Additionally, a toysmart.com spokesman confirmed with the E-Commerce Times that BVIG will take three of the five board seats of the Waltham, Massachusetts-based online toy retailer.

The company’s toys will be featured across BVIG’s extensive inventory of online properties, including Family.com. The selection consists exclusively of “good toys that nurture children’s imaginations,” such as building blocks, puzzles and arts and crafts.

“Toysmart.com and BVIG believe that high-quality, educational toys represent an exciting business opportunity in a fast-growing market segment,” said BVIG e-commerce President Chuck Davis. “Our investment in toysmart.com strengthens our commitment to serving the online commerce needs of families.”

Building Blocks of a Market Share

Toysmart.com is a December 1998 spin-off of the Holt Company, a retailer of educational supplies. The company, which recently moved into a 50,000 square foot headquarters in the Boston suburb of Waltham, was initially launched as the Holt Educational Outlet in October 1997 and claims to be the first online toy retailer.

A company spokesman told the E-Commerce Times that toysmart.com recently launched a $20 million branding campaign in preparation for the Christmas shopping season. The campaign will consist of television, radio, print and online ads.

No Mickey Mouse

BVIG’s marketing clout will contribute heavily to the campaign’s effectiveness. The Burbank, California-based company was formed by the Walt Disney Company in 1997 to create a centralized organization for its growing Internet ventures.

BVIG’s three major divisions are Disney.com, ESPN Internet Ventures and ABC Internet Group.

In June 1998, Disney bought 43 percent of Infoseek, which was then folded into Disney’s recently-launched GO Network. According to the company, GO has been measured as the fourth-most visible network on the Web, despite the mixed reviews it has drawn since its launch in January.

From Mags to the Web

Meanwhile, Disney’s decision to drop one of its print magazine publishing businesses will yield a new alliance in the online world. Disney said Wednesday that it has agreed to sell its Fairchild Publications, Inc. subsidiary to Advance Publications, a division of media conglomerate Newhouse Corp. “Disney and Advance have agreed to explore forming an Internet joint venture using the content of all appropriate Advance and Disney magazines,” Disney said.

Advance will take control of more than a dozen consumer and trade publications, a book-selling division and Fairchild Urban Expositions, a trade-show partnership. Advance will also take control of 14 Web sites, most associated with magazines or other offline Fairchild businesses. Although Advance will take over publication of women’s magazines Jane, W and Women’s Wear Daily, Disney retains the rights to publish select content from those magazines on its Internet sites, including a new women’s site that is currently under construction.

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