How Amazon's alliance with Toys R Us went sour

[mandy]

In August 2000, Amazon.com Inc. and Toys "R" Us Inc. signed a groundbreaking agreement: For 10 years Amazon would devote part of its Web site to Toys "R" Us's toy-and-baby-products. The toy retailer would choose the hot products to stock and buy the inventory for the virtual shelves.

The pact was widely heralded as an example of how young Internet companies like Amazon would soon be tying up with "bricks and mortar" retailers to mutual benefit. Instead, the deal has turned into a case study of how quickly promising alliances can turn into acrimonious business disputes as companies adjust to the shifting realities of the Web.

full article: http://www.post-gazette.com/pg/06023/643018.stm

[mandy]

Update: Toys 'R' Us wins lawsuit against Amazon.com, to set up separate online store

Toys “R” Us Inc. prevailed in a bitter lawsuit against online giant Amazon.com Thursday when a New Jersey judge ordered the two companies to sever their partnership, clearing the way for the toy retailer to establish an independent Internet store.

Toys “R” Us executives hailed the ruling and said they intended to move quickly to create a new and independent Web site...

Although the ruling does not include monetary damages, the loss of Toys “R” Us as a partner could have a significant financial impact on Amazon...

full article: http://msnbc.msn.com/id/11641703/

[amy]

When pushed on the witness stand, “certain information ‘just came back to him’” she said in the ruling, while another of Bezos’ explanations was referred to as “rather childlike.”

I don't think the judge liked Jeff Bezos' performance in court at all. 

[mandy]

Update: Amazon lost its appeal on the ToysRUs split.

Amazon.com on Friday delivered news investors didn't want to hear. What it didn't say was that the news was late in coming.

In a regulatory filing, the online retail giant said the New Jersey Superior Court's Appellate Division on Thursday denied its request to postpone its court-ordered separation from longtime partner Toysrus.com, pending an appeal.

The company said the decision could lower its operating profit by as much as $25 million for the current quarter and $50 million for the year...

full article: http://seattletimes.nwsource.com/html/bu...zon03.html

[Kristijntje]

A related article.  Toy selling after the split.

Amazon.com and Toysrus.com -- partners in the online toy world since 2000 -- have become staunch rivals this holiday season, battling for consumers' share of dollars for toys.

These two rivals will also have stiff competition from online auction house eBay Inc., as well as target.com and walmart.com, both of which are expected to be aggressive with discounting.

"It's going to be a very interesting battle to watch," said Heather Dougherty, senior analyst at Nielsen/NetRatings Inc., an Internet research company.

This is only good news for shoppers, who will have expanded assortment and services. Toy makers also expect to see their online toy business expand at a time when the toy industry is struggling with stagnant growth...

full article: http://www.delawareonline.com/apps/pbcs....80316/1003