• MSNBC.com/AP, Friday, October 6, 2006 1:33 PM

Toysrus.com--which teamed with Amazon.com a year after its disastrous 1999 holiday season, when some customers got their toys delivered after Dec. 25--is gearing up for a serious battle for consumer dollars this holiday season. The companies severed ties following a ruling in March, which found that Amazon.com breached a deal to give Toys "R" Us Inc. exclusive rights to supply some toy products as a third-party vendor on Amazon.com. Amazon is appealing.

Meanwhile, Toys "R" Us is angling to take a big share in cyberspace by offering gift cards for the first time and by expanding its merchandise to include children's books and DVDs--services that were prohibited under the previous partnership. It also is offering more toy exclusives this year, something that Amazon.com does not have. Toys "R" Us teamed up with logistics expert Excel and e-commerce expert GSI Commerce Inc. to bolster its toysrus.com and babiesrus.com sites, and has opened a new fulfillment center. The two rivals face stiff competition from online auction house eBay Inc., as well as target.com and walmart.com--both expected to be aggressive with discounts.

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