**Amazon, Toysrus.com Agree to Partnership

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Amazon.com and Toysrus.com will partner to operate Web sites selling toys, video games and baby products.


Under terms of the 10-year strategic alliance, Amazon.com, Seattle, will provide site development, order fulfillment and customer service. Toysrus.com, which is majority-owned by brick-and-mortar retailer Toys 'R' Us Inc., Paramus, NJ, will identify, buy and manage inventory. Amazon.com will house inventory from both companies in its distribution centers.


The site offering toys and video games is expected to open this fall, and the site offering baby products is expected to open in the first half of next year. The agreement also allows for the global expansion of the partnership.


Amazon.com will be compensated through a series of fixed payments, per-unit payments and a single-digit percentage of revenues. It also will receive warrants entitling it to acquire 5 percent of Toysrus.com. Amazon.com, Toys 'R' Us and Toysrus.com will market the sites to their respective customers.

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