Publisher bids for eToys technology, customer list

The publisher of the Harry Potter series and other children's books placed the winning auction bid for the product inventory of defunct online toy retailer eToys Inc., but the purchase is contingent on also getting Web-related technology and other assets in a separate bidding process this week.

Scholastic. announced on Tuesday, it had bid about US$8 million for toys, books and videos that were owned by eToys, which filed for bankruptcy protection and shut down its Web site earlier this month. The purchase price amounts to roughly 30 percent of the dollar value of the inventory, Scholastic said.

However, the book publisher added that the inventory buy depends on whether it is also able to successfully bid for other eToys' assets, "particularly technology that may accelerate and reduce the costs of Scholastic's own Web initiatives." A Scholastic spokeswoman said the company is particularly interested in computer hardware and software that belonged to eToys, plus the online retailer's customer list.

The auction of those assets is scheduled to take place on Thursday. Scholastic, which also distributes books, software, toys and other products, is interested in the technology and the customer list for potential use as part of a project in which it's developing a Web site that would sell toys and other merchandise.

While the privacy policy posted on the eToys Web site stated that the retailer would "not sell, rent, loan or transfer any personal information regarding our customers or their children to any unrelated third parties," the list potentially could be included in a sell-off of all the company's assets to a single buyer. Scholastic would stand to gain information on about 3 million customers if its bid is successful.

Los Angeles-based eToys filed for Chapter 11 protection on March 7 after reporting a loss of $74.5 million for its third fiscal quarter ended in December. The company, which was in danger of running out of money by the end of this month, had previously laid off 700 of its 1,000 workers and told the remaining employees that they would also be let go.

Shortly before eToys formally made its bankruptcy filing, health care products maker Johnson & Johnson announced that it was buying the online retailer's BabyCenter subsidiary for $10 million. BabyCenter operates a Web site that provides information about pregnancy and the development of babies, plus an affiliated site for parents of older children.

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