Toys “R” Us Lands On AOL For Two Years

Toys “R” Us, Inc. announced yesterday that it has signed a two-year agreement with America Online that will give it anchor placement in the Toys department of the Kids, Toys and Babies category in the new Shop@AOL.

Additionally, the brick-and-mortar toy giant’s Web site will be promoted across other AOL brands, including AOL.COM, Netscape, CompuServe, and Digital City shopping destinations.

“Toysrus.com is delighted to be working with an industry leader like AOL and reaching their millions of members and visitors,” said Toysrus.com CEO John Barbour. “Becoming an Anchor Tenant on AOL is one of the ways we intend to make shopping for toys and related products easier and more convenient for consumers on the Internet.”

Toys “R” Us will also be highly profiled in several other departments, including the Educational Toys, Collectibles and Hobbies, and Electronic Gaming areas.

Making Up For Lost Time?

This move by Toys “R” Us comes less than a week after it launched a massive affiliate program with LinkShare and Tutornet.com, and comes shortly after chief online rival eToys made a foray into the United Kingdom.

While industry observers feel that the Paramus, New Jersey-based Toys “R” Us finally seems to be moving in the right direction, they also point out that the damage done by its recent top management problems will not be easily swept away.

Turmoil Underscored By Indecision

In August, when Toys “R” Us chief executive officer Robert Nakasone stepped down, many analysts believed that the resignation was a direct result of the company’s inability to formulate an effective online marketing strategy.

Evidence of the failed strategy was displayed the same month when the toy giant announced that it had severed its much-touted partnership with Benchmark Capital. Toys “R” Us declined to go into the details as to why the deal crashed and burned, but some speculate that the Silicon Valley venture capital firm felt the company would have insisted upon applying its brick-and-mortar mindset to its e-commerce-marketing foray.

This management upheaval came only a month after Robert Moog — recruited in May to be the Toys “R” Us Internet guru — decided to pack it in.

Putting It Together

Since then, Toys “R” Us has hired John Barbour as its new CEO and targeted $80 million (US$) to bringing its site back into thee-commerce arena.

About Toys “R” US

With more than 1500 stores, Toys “R” Us has operations in 25 countries including Japan and Canada.

However, since losing its number one position to Wal-Mart as the largest discount toy seller, Toys “R” Us has been restructuring by closing down some stores while remodeling others.

In its fiscal year ending January 1999, Toys “R” Us lost $132 million on revenue of more than $11 billion.

Yesterday, the price of its stock closed up 7/8 at 15. Its 52-week high is 24 3/4, and its 52-week low is 13 1/8.