Toysmart’s Other Suitor

Digital Research would use e-tailer’s database for a privacy survey

FOR ALL THE GRIPING by the privacy lobby about a sale, the Toysmart.com database has attracted only two suitors. And neither plans to use it very much, if at all.

Toysmart, the bankrupt e-tailer, pulled the database – and its other Web-based assets – off the market last month because it was not satisfied with the bids it received.

Disney, a 60% owner of Toysmart’s site, made a $50,000 offer for the list before a Federal Trade Commission ruling came down linking the file’s sale with Toysmart’s other Web assets. However, it planned to retire the database as a goodwill gesture.

Privacy advocates had been in an uproar over a potential sale because Toysmart had promised that the data collected on its Web site would not be shared with third parties.

The other bidder, Kennebunk, ME-based Digital Research Inc., offered $16,000 and a percentage of the proceeds from the sale of the other assets, but said it would never take possession of the database.

So what would the company do with it?

It would use the database to conduct an online survey of Toysmart customers on privacy matters.

Digital Research maintains a consumer technology panel of 80,000 individuals who have opted in to participate in these surveys. While Toysmart’s list does not necessarily represent the whole online community, it would provide the firm with a chance to gather data on individuals during a privacy controversy, according to Digital Research president Bob Domine.

If Digital Research gets the database, it will ask the court to have Toysmart send out a one-time-only e-mailing to everyone on the list, inviting them to participate in the panel. Digital Research would thus gain access only to the names of people who had opted in.

The firm would post survey results on its Web site (www.digital research.com) and forward them to concerned organizations such as the Federal Trade Commission.

Domine claims that selling the list to Digital Research will generate more revenue for Toysmart’s creditors than a sale to Disney might. Domine also would sell off Toysmart’s Web site resources which, according to a deal negotiated with the FTC allowing the sale to proceed, must be sold along with the names.

Toysmart’s Web assets include 33 URLs and the programs used to run the site. A percentage of revenue from the sale would be returned to the company’s creditors.

With sites like the failed Boo.com going for upward of $300,000, Domine feels Toysmart’s creditors would realize more benefit than if the list were sold outright to Disney.