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Webkinz May Be Changing Business Model

Webkinz dolls--which were introduced by Ganz in the spring of 2005 and quickly become one of the most popular toys among the elementary-school set--appears to be changing its business model. The formerly ad-free Webkinz Web site began running movie ads in October (but they were withdrawn yesterday). And its stuffed toys are now sold at mass retailers so parents no longer need to hunt them down at small specialty stores.

Ganz has been decreasing the number of sales reps that sell to small stores, and some small stores are starting to promote other toys--like Russ Berrie Shining Stars--which also come with a companion virtual world, says Lutz Muller, a retail research firm. Muller suggests that Ganz might be repositioning Webkinz as a mass product so that it could sell the brand to a larger corporation.

The Campaign for a Commercial-Free Childhood is demanding that Webkinz.com remain ad free. Ganz did not respond to requests for comment

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