SANTA MONICA, Calif.--(BUSINESS WIRE)--Nov. 2, 1999--

eToys Inc. (Nasdaq:ETYS) today announced the launch of a major "clicks and mortar" marketing initiative with GapKids and babyGap that will run nationwide during the upcoming holiday season. The program unites eToys, the leading Internet retailer of children's products, with GapKids and babyGap, a premier clothing retailer for kids and baby.

Titled "Holiday Get-Together," the cross-promotion will be featured both online and in-store at GapKids and babyGap, as well as at eToys.com. The promotion offers GapKids and babyGap customers a $10 eToys gift certificate with any purchase of $75 or more. Similarly, customers who spend $75 or more at eToys.com will receive a $10 gift certificate good at GapKids and babyGap (online or in-store). The eToys and Gap online promotion begins today and will run through Dec. 15. The in-store component will begin on Nov. 11 and will run through Nov. 28.

"This marketing agreement represents a significant association of two premier brands dedicated to providing a high-quality customer experience," said Janine Bousquette, senior vice president of marketing for eToys. "One of the ways eToys will build an enduring and meaningful brand is through highly selective partnering initiatives with family-oriented consumer icons such as Gap."

"We are really excited because merging online and offline is such an innovative approach to marketing," said Jayne Greenberg, vice president, Gap Inc. Direct Business Development. "And this partnership with eToys creates an added value to our GapKids and babyGap customers, especially during the holidays."

eToys will feature a distinct Web page devoted to the "Holiday Get-Together" promotion, accessible from the eToys.com homepage. Both gapkids.com and babygap.com will feature the promotion throughout their sites. And in-store, GapKids and babyGap will support the promotion with similar creative materials.

Advertising includes full-page newspaper ads throughout the United States, as well as online banners on major sites.

About Gap

Through more than 1,900 stores in the United States, United Kingdom, Canada, France, Japan and Germany, Gap sells clothing, accessories and personal care products for adults, kids and baby. In the United States, customers can shop the Gap Online Stores at gap.com, gapkids.com and babygap.com.

About eToys

Based in Santa Monica, eToys Inc. (www.etoys.com; AOL keyword: eToys; and www.etoys.co.uk) is the leading Internet retailer of children's products, carrying more than 100,000 items, including both nationally advertised and specialty toys, software, videos, music, video games, books and baby-oriented products. By combining this extensive selection, an attractive, easy-to-use Web site and excellent customer service, eToys offers consumers a unique one-stop source for children's products. Through its wholly owned subsidiary, BabyCenter Inc. (www.babycenter.com), eToys offers Webby-award winning content and community for new and expectant parents.

Forward-Looking Statements

Statements made in this document that are forward-looking involve risks and uncertainties that could cause results to differ materially from those expressed. Such risks and uncertainties include, but are not limited to, eToys' expectation of operating losses and negative cash flow for the foreseeable future. There can be no assurance that the company's relationships with GapKids and babyGap or the other marketing initiatives described above will be successful or that any of them will have a positive impact on eToys' business, financial condition or prospects. Other risk factors include eToys' limited operating history, unpredictability of operating results, seasonality, inventory risk, reliance on key vendors and distributors, as well as the competitive marketplace. Other risks are set forth in eToys' Form 424B4 Prospectus dated May 19, 1999, under the heading "Risk Factors" and in eToys' other filings with the Securities and Exchange Commission.