Welcome to the World of Webkinz

Webkinz is the most interesting new business idea I’ve heard about in a while.

And what makes it even more interesting is that I first heard about it not from Steve Rubel or Michael Arrington but from a very sweet 5-year old girl named Kendra.

Created by Ontario-based gift and toy maker Ganz, Webkinz is an interesting mash-up of up beanie babies, neopets and a whole whack of the best ideas from the online world—from social networking to chat to avatars to online virtual worlds and beyond.

Here’s an excerpt from a recent Washington Post piece on the phenomenon:

Each stuffed animal comes with an identification number that gives children access to the Webkinz site. There, owners discover their pets' online personas ("I'll let you in on a secret," reads the profile of a cocker spaniel. "I love fish sticks, and I've always wanted a bunny clown.") Children can buy clothes for their pets using virtual money, outfitting them in baggy jeans or pink tutus. They can also decorate their pets' virtual rooms with such items as a stove, a boy-band poster or a bed shaped like a pirate ship.

For many children, Webkinz offers a "Velveteen Rabbit" moment: a chance for their real-world toys to come to life and play with their friends. Snuggling next to your Webkinz before falling asleep is fun, kids say. Designing outfits for a pet in the Webkinz SuperModelz game and having your friends vote on their favorite is even better.

Children can also train for the instant messaging marathons of their older siblings' worlds by sending preset phrases to their friends. They can even invite pets over to hang out -- virtually, of course.

Since it launched in 2005, the site has grown to over 1,000,000 users. And even more impressive, it’s all been done without an advertising budget.

I have seen first hand how this works—thanks to our conversation with Kendra and her enthusiastic mom this past weekend, my 4 year old is one of those million-plus users as of yesterday!

When it comes to security—obviously a big deal in the minds of parents for anything online involving kids—Ganz seem to have their based covered too. As B.L. Ochman sums it up in a recent post:

Safety is Webkinz' biggest parental appeal, and the site says that "chat is constructed, so users can’t type in whatever they want. Nothing inappropriate can be said, and there is no way to exchange any personal information."

I find this whole thing incredibly interesting on a number of levels . . .

First, as the Washington Post’s Ylan Q. Mui observes, it’s a fascinating illustration of “how children's play is changing, moving effortlessly between the real world and the Web.” My son is growing up in such a different world than I did.

And second, I am fascinated by the way a farily traditional consumer goods manufacturer like Ganz has suddenly established this powerful direct connection with their customers by merging the physical and virtual worlds in such an innovative way. I would love to know the inside story of how this innovation came about.

And finally, I am convinced that there are many more companies that could benefit from a similar approach—taking a traditional product and adding a new network-powered dimension to create an infinitely richer and more valuable customer experience.

TAGS: webkinz, beaniebabies, neopets, kids, games, socialnetworks, avatars, chat, marketing, toys, ganz