eToys.com was a retail website that sold toys via the

Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, p ...

. It was established by a

startup company A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend ...

of the same name on November 3, 1997. After an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

on January 4, 1999, the company quickly shot up in value, becoming emblematic of the

dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Comp ...

. The company went bankrupt on April 1, 2001, and shut down soon thereafter. The etoys.com domain went through a number of changes of ownership afterwards, and has been owned by

Toys "R" Us Toys "R" Us is an American toy, clothing, and baby product retailer owned by Tru Kids (doing business as Tru Kids Brands) and various others. The company was founded in 1957; its first store was built in April 1948, with its headquarters loca ...

since February 2009.

History

eToys was launched on November 3, 1997, as an

Idealab Idealab (formerly known as idealab!) is a startup studio based in Pasadena, California, U.S.A. History Idealab was founded by Bill T. Gross (not to be confused with the founder of PIMCO, Bill H. Gross) in March 1996. Prior to Idealab, Gross foun ...

company. In 1999, eToys held an IPO. Shares were issued at $20. At the end of the first day of trading, the stock closed at $76 a share. eMarketer was once quoted as saying; "Put simply, eToys is the benchmark against which all other toy sites are measured". In 1999, the company was involved in a high-profile dispute with Swiss art site etoy. EToys attempted to seize the etoy.com domain from etoy on the grounds that it was confusingly similar to its own domain, but it relented after widespread Internet outrage.

Bankruptcy

Around March 7, 2001, ''

The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

'' reported that

KB Toys K·B Toys (also known as Kay Bee Toys) was an American chain of mall-based retail toy stores. The company was founded in 1922 as Kaufman Brothers, a wholesale candy store. The company opened a wholesale toy store in 1946, and ended its candy wh ...

acquired the bulk of eToys' remaining assets for $5 million.

Bain Capital Bain Capital is an American private investment firm based in Boston. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate. Bain Capital invests across a range of industry se ...

owns KB Toys. The law firm Traub, Bonacquist & Fox represented the creditors in the

Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whe ...

proceedings. Paul Traub, a partner in the firm, had shortly before formed a company called Asset Disposition Advisors, LLC with Barry Gold. This relationship became controversial when Gold was appointed CEO of eToys. Some complained there was a conflict of interest, though a judge later found no fault.

Subsequent ownership

Nearly all the eToys assets were acquired by

in two separate

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

auctions, then later sold to D. E. Shaw, a New York-based

hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...

. The eToys.com website was eventually reopened by eToys Direct Inc., a descendant of Internet startup and

partner Brainplay.com, and a subsidiary of Parent Company. It continued to market toys by

mail order Mail order is the buying of goods or services by mail delivery. The buyer places an order for the desired products with the merchant through some remote methods such as: * Sending an order form in the mail * Placing a telephone call * Placing ...

under the eToys name through both the website and printed catalogs. Parent Company and nine of its subsidiaries including eToys Direct filed for Chapter 11 bankruptcy on December 22, 2008. eToys.com was acquired by Toys "R" Us in February 2009.

References

{{reflist

External links

eToys.com
Toys "R" Us American companies established in 1997 Retail companies established in 1997 Internet properties established in 1997 Retail companies disestablished in 2009 Internet properties disestablished in 2009 Toy retailers of the United States Online retailers of the United States Defunct online companies of the United States Companies that filed for Chapter 11 bankruptcy in 2001 Dot-com bubble 1999 initial public offerings