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Santa is good to Toysrus.com

Retailing giant Toys "R" Us says that sales for its joint e-tailing site with Amazon.com nearly tripled for the 2000 holiday season, an upbeat contrast with 1999's year-end disaster.

Retailing giant Toys "R" Us said Thursday that sales for Toysrus.com, its joint e-tailing site with Amazon.com, nearly tripled for the 2000 holiday season, wrapping up the year in an upbeat contrast with 1999's year-end disaster.

For the nine-week holiday period, ended Dec. 30, revenue for Toysrus.com jumped to $124 million from $39 million in the 1999 holiday season. Toysrus.com year-to-date sales increased from $44 million to $164 million from the same period a year earlier.

The company, which linked arms last August with heavyweight e-tailer Amazon to offer a co-branded e-commerce site for toys and video games, also reported $4.2 billion for overall sales during the holiday period, including its brick-and-mortar businesses.

The 2000 holiday season marked the first time that Toys "R" Us has reported sales figures as an Amazon alliance partner. While the recent holiday shopping season cooled in the days nearing Christmas, several online retailers churned out healthy gains for the overall season.

Other online notables including Kmart's BlueLight.com and Yahoo, whose shopping properties include links to retailers such as Macys.com and Banana Republic, recently reported hefty increases in holiday sales. Last week, Yahoo said order volume in the United States across its shopping properties during the season nearly doubled from the same period a year earlier. BlueLight.com said sales rocketed more than 1,000 percent compared with the same period in 1999.

According to a recent Nielsen/NetRatings report, Amazon and Toys "R" Us nabbed 123 million visits during the holiday season, dominating the top 15 online retailers that Nielsen/NetRatings tracks. The pair logged more than five times as many customers as the next-closest competitor, eToys, which garnered more than 21 million visits.

In mid-December, eToys warned that third-quarter revenue will fall well short of analysts' estimates. The troubled company also said that it will run out of cash around the end of March, so it has begun exploring options to sell the company or its assets and intends to announce layoffs early this year.

Kudos to Amazon
In a conference call Thursday morning, Toys "R" Us executives told analysts and reporters that they believe the Amazon agreement continues to be a smart move strategically and will likely help Toysrus.com turn a profit soon.

The company said it is saving heavily in capital because Amazon, as part of the partnership, takes on the responsibility of improving the site, as well as handling order fulfillment and other aspects that Toys "R" Us doesn't necessarily have the capabilities to manage.

For many struggling e-tailers, the 2000 holiday season was either going to make or break their businesses. After some of last year's holiday shopping disasters, several companies invested heavily to please some of 1999's dissatisfied online customers with improvements in order fulfillment, customer support and on-time deliveries.

The Amazon pact "is the right move strategically and will probably become a model for others as a way to make money as a dot-com," said Toys "R" Us chief executive John Tyler, who added that the company is on track to meet analysts' expectations for its online business in the fourth quarter. Tyler said he expects the Amazon partnership to generate continued strong sales in the coming year.

Toys "R" Us--which was knee-deep in dissatisfied customers during the 1999 holiday season, when it did not give shoppers enough notice of impending shipping delays--also boasted a 99 percent on-time delivery track record for the 2000 gift-giving season.

Last summer, seven e-tailers, including Toysrus.com, agreed to pay a total of $1.5 million in fines related to Federal Trade Commission charges concerning shipping delays during the 1999 holiday season. The FTC alleged that the online stores did not warn shoppers ahead of time of possible shipping delays or that they continued to promise deliveries they could not make during the holidays.