A Virtual Popularity Contest

In the Online Playground, Barbie's Doing the Chasing

Barbie's got problems. And the lead paint on her cat is the least of her worries.

Last year, Mattel's iconic doll -- and some of her pets -- were swept up in the company's recall of millions of Chinese-made toys. Hundreds of thousands of Barbie accessories were pulled from shelves for having lead paint or dangerous magnets.

Just recently, Mattel reported that U.S. sales of Barbie products dropped 15 percent in 2007 -- a blemish on an otherwise rosy year for the company, which posted a $600 million profit.

The recalls, it turns out, had little to do with Barbie's slide, toy industry analysts said.

What kept Barbie on the shelf was competition from the likes of a Hannah Montana doll and, more importantly, toys such as Webkinz that incorporate online games, social networking and other elements of virtual play.

"When you're spending a lot of time [on Webkinz], you're not spending four hours on Barbie dolls," said Gerrick Johnson, a toy industry analyst with BMO Capital Markets.

With girls trading in dollhouses for keyboards at ever-younger ages, Mattel and other major toy companies including Hasbro and MGA Entertainment, the maker of Bratz dolls, are responding by building their own virtual playgrounds.

Studies indicate that young girls spend an estimated seven hours a week playing on computers, twice as much as they spent four years ago. Children begin playing on the computer around age 5 1/2 -- the same time at which girls typically take up Barbie, according to a 2007 study by market research firm NPD Group.

While it's hard to imagine that the blonde bombshell who has outlasted the Cold War and eight-track tapes could have serious rivals, Barbie has been duking it out in toy aisles since the 2001 arrival of Bratz, the hip-hop-style dolls with big eyes and racy wardrobes that make many moms shudder. At times, the competition got ugly, with Mattel and MGA Entertainment trading lawsuits and accusing each other of stealing ideas. In 2006, Barbie looked as if she had survived the tussle, at least in terms of sales. Then a new onslaught of competitors arrived.

Hannah Montana, for one. Toys bearing the likeness of the Disney Channel character played by Miley Cyrus, daughter of country singer Billy Ray Cyrus, had some of the greatest growth last year, NPD Group reported.

However, the long-term threat to Barbie comes from the surging popularity of toys such as Webkinz.

Webkinz, introduced by Ganz in 2005, is a plush toy that comes with a code allowing children to go online and learn about their toy's virtual persona and visit with friends in virtual rooms they decorate.