Barbie Girls Aren't Plastic

This week's quarterly earnings report from Mattel (NYSE: MAT  ) showed a year-over-year dip in Barbie doll sales domestically, but it's a whole new ballgame in cyberspace. According to a blog entry in Scientific American last week, Mattel's BarbieGirls.com website attracted 2.75 million registered users during its first 60 days; 40,000 to 50,000 new members are signing up daily.

The virtual community's successful launch was confirmed earlier this week during Mattel's conference call, with CEO Bob Eckert claiming that "almost 3 million girls have registered with the site."

Yes, it's mostly a free site, but you're talking about a site that's still in beta. That's an impressive adoption rate of a mostly young audience of doll fanatics rushing to create virtual Barbie avatars and socialize in a family-friendly environment.

In short, Barbie doll sales may have dipped 5% stateside this past quarter, but don't tell young girls that Barbie isn't cool anymore. The mad rush to BarbieGirls.com is encouraging for a brand that has survived through decades of ups and downs.

It's free to register, but members are also encouraged to pay for virtual items. However, the real kicker here is this month's launch of Barbie Girls dolls that double as MP3 players. The $60 plaything also opens up exclusive areas within the Barbie Girls website.

It may not be all that different from Ganz' Webkinz, where stuffed animal purchases are enhanced online with virtual personifications of your critters, but it's a great move by Mattel. Parents who may be hesitant to pay for virtual goodies won't have much of an excuse when it comes to buying stylish -- yet 512 meg small -- MP3 players.

The toy isn't a threat to Apple's (Nasdaq: AAPL  ) iPod empire, although it may eat into entry-level players that include Apple's iPod Shuffle.

But why stop there? If the portable digital music players are a hit, what's to stop Mattel from tying other Barbie dolls, games, and accessories to virtually owned items within BarbieGirls.com.

That would be an easy way to see Barbie product sales bounce back as we head into the telltale holiday season. It would also be a great way to set its virtual community apart from hot hubs like Club Penguin, Viacom's (NYSE: VIA  ) NeoPets, and Disney's (NYSE: DIS  ) Virtual Magic Kingdom.

With an army of nearly 3 million registered users and counting, it's certainly a smarter plan to matter in cyberspace than launching Ken Boys.

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Longtime Fool contributor Rick Munarriz wonders who will have the hot toys for the 2007 holiday season. He does own shares in Disney. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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