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Barbie's last online stand?

Iconic doll has long been a standard of American homes. Now she's trying to stay alpha girl in a virtual world filled with Webkinz and Bratz. Meet the new Barbie Girls

Barbie has long been the only doll in town for girls. But online, the fashion icon is struggling to stay the most popular in a class of virtual penguins, Mickey Mouse and small plush pets.

Mattel, the maker of Barbie, is preparing one of its biggest updates of the toy's image; this summer, it will start selling plastic "Barbie Girls," a handheld MP3 player that can be accessorized like a doll and used to unlock special animations, make friends and shop in a virtual world on the Web. The toy is likely to test Mattel's ability to stay relevant in a Digital Age that has changed the way little girls play and socialize.

Certainly, Mattel has tried to keep its brands Internet-savvy for more than a decade. Mattel's and have the highest concentration of girls age 2 to 11 on the Web, according to researcher Nielsen NetRatings, but their overall audience hasn't grown much over the years.

The company is also being pressured by toys like Webkinz and an avalanche of virtual worlds designed for kids. Bratz, for example, the racier fashion dolls that have eaten into Barbie sales in recent years, plans to launch a virtual world called Bratz World ( and a Rescue Pets (my this summer.

"Mattel is the 800-pound gorilla in the toy industry, and it's worked hard to continually reinvent itself," said Lisa Bradner, senior analyst at Forrester Research. "I think they'll continue to be a very strong player, but it's hard to innovate at the speed and agility that a company like Webkinz can."

The overall audience for Barbie sites has declined slightly over the last year, and has failed to grow over the last three years. According to Nielsen NetRatings, the Barbie site attracted about 1.9 million unique visitors from home and work in April 2007, down from 2.1 million in April 2006. Those numbers are in line with about 2 million visitors in the same month in 2004.

In contrast, Webkinz--plush pets with corresponding virtual homes on the Web--have exploded in popularity over the last year. In April, Webkinz attracted 3.6 million unique visitors from home and work, up from just 285,000 a year before. Webkinz has even usurped the long-reigning virtual pets site of the Web--Neopets, which went from 2.6 million unique visitors in April 2006 to 3.2 million in 2007.

Another major contender in the kids category, ages 2 to 11, is Club Penguin, a virtual community of penguin avatars for children. It drew more than 4 million unique visitors in April. And, the generalist playground of Mickey Mouse and other characters, attracted more than 11 million visitors that month.

"Certainly it's a competitive market. It's going to be up to Mattel to keep up with kids' interests," said Heather Dougherty, a senior retail analyst at Nielsen NetRatings. "They need a wildly popular Webkinz-like product."

Still, Mattel is hoping a Barbie MP3 player can lure an audience of little girls through music, and eventually outpace other real-to-virtual-world toys. (The music player, which will begin selling in July for about $60, can hold up to 120 MP3s or 240 WMA-file songs. Girls can buy $10 accessory kits to dress up the toy MP3 player.)

"This is a new type of play experience, with a real world and online experience," said Rosie O'Neil, brand manager in marketing and "chief Barbie girl" for Mattel. "In the real world, it's a next-generation fashion doll, an MP3 player that works like a Shuffle. It has a USB key to unlock a bunch of new features on, where they can do things like adopt pets and buy furniture."

O'Neil added that the new site is the first virtual world designed exclusively for girls, and that could go a long way to appeal to its target audience. (Mattel officially launched its new virtual world on April 26, and so far, has registered half a million kids, according to O'Neil.) "We're growing at a rate that's unprecedented," she said.

"There is a large group of girls who still love Barbie, they're just playing with it in a different way."
--Rosie O'Neil, brand manager in marketing, Mattel

"There is a large group of girls who still love Barbie, they're just playing with it in a different way," she added. "We found that with girls 7 to 12 they love the online experience. This is fusion of those worlds."

Mattel introduced Barbie in 1959, and she has been the No. 1 fashion doll for the last 49 years, according to the company. But Barbie has faced declining sales in the last five years in the face of new technologies and newer, racier rivals like Bratz.

In-store sales of Barbie in the United States, for example, were down 20 percent in the first quarter compared with the same period a year before. But Oppenheimer & Co. financial analyst Linda Bolton Weiser said in a research note that if the new Barbie MP3 player could leverage similarities to Webkinz's viral growth, Mattel could see some upside: a maximum annual sales potential of about $100 million.

Still, she warned of some weakness in the product, including the design of the virtual world that doesn't encourage "movement through the world and discovery of the content."

Like many major retail brands, Mattel has tried many Internet initiatives. As early as 1998, Mattel began letting kids customize a version of Barbie via a Web site. In the late 1990s, it launched a Barbie-themed PC, which failed to captivate the market. And during the dot-com boom, it also bought girls-game company Purple Moon, which operated a community site for girls. That site has apparently morphed into Mattel-owned It's even penned a Barbie blog, which seems to no longer exist.

That said, Bradner believes Mattel has an opportunity to capture the girls market online by differentiating itself with an MP3 player and a safe haven on the Web.

Mattel said it has infused safety in the product and virtual world. Among the safety features of its virtual world are filtered online chat that prevents hate language or girls from giving out personal information. It also requires that owners of Barbie Girls MP3 player physically connect the device to a friend's computer before they can be "best friends" in the virtual world, giving them special chat privileges like sharing that personal information.

Mattel could ultimately be hobbled by the nature of its business, however.

"In an industry like toys, companies have to go from cranking a product for Wal-Mart store shelves to creating a brand experience that extends online," Bradner said. "And it's hard for brands to do content--that is not their primary business and it involves huge investment in time and resources."