, Unite and Thursday
teamed to create a new online store offering a variety of toys and video games.

Once the new toy and video store is up and running at in the fall, the site will serve as a gateway
that redirects users to the new outlet’s location.

Additionally, and will extend the success of the
recently launched with
the debut of a co-branded baby products store during the first half of 2001.

The alliance unites two leading retailers — one
in brick-and-mortar retailing, one in e-commerce — to create a better
shopping experience, noted Jeff Bezos, founder and chief
executive officer.

“This is a huge win for our customers,” said Bezos. “Our existing toys
and games business has grown rapidly because
customers appreciate our passionate focus on selection and customer

By joining with Toys “R” Us, we’re bringing customers an even
greater and more diverse product selection and teaming up with a
leading resource for toys, games and baby products,” he said.

Each company will assume responsibility for specific aspects of the toy
and video
games and baby products stores. will identify, buy and
manage inventory; will handle site development, order
fulfillment and customer service, housing both’s and its own
inventory in’s U.S. distribution centers. will be compensated
through a combination of periodic fixed payments, per unit payments and
single-digit percentage of revenue. The specific amounts of the payments were not disclosed.

It’s a nice, complementary deal, according to Forrester senior analyst
Seema Williams.

“Amazon does not do all that well selling toys, Toys R Us
doesn’t do that well selling online. It’s definitely solving the biggest
problems both of them have.”

Williams added that a 10-year deal is “very uncommon, particularly in a Web
environment, where most agreements do not exceed two years.

The agreement allows for global expansion of the arrangement. will also receive warrants entitling it to acquire 5 percent

All parties will market the co-branded store to their respective

According to Media Metrix, a
source of Internet and digital media measurement, was the
number-one-ranked online toy site for April and May 2000.

Amazon already has partnerships with online retailers such as Inc. , Inc. and Inc. .

Amazon said last week that most of the revenue booked through its network
of such Internet partners came in the form of stock in those companies.

News Around the Web