eToys Secures National Online Exclusivity forDiscovery Toys, a Premier Direct Seller of...

SANTA MONICA, Calif.--(BUSINESS WIRE)--Oct. 21, 1999--

eToys Inc. (Nasdaq:ETYS), the leading Internet retailer of children's products, today announced that it has become the exclusive online distributor of Discovery Toys, a premier direct seller of children's developmental products. Under

eToys broadens its educational products line-up with the addition of Discovery Toys. The award-winning Livermore, Calif.-based Discovery Toys has been recognized for more than 20 years as a leading company focused on enhancing the lives of children with developmentally appropriate products that make learning fun. The relationship between eToys and Discovery Toys is ideal based on both companies' commitment to children.

"Our objective of creating the industry's gold standard shopping experience begins with the largest and most diverse selection of children's products," said Jane Saltzman, vice president of merchandising, eToys Inc. "Our relationship with Discovery Toys, and the addition of their inspiring and imaginative products, significantly strengthens this cornerstone of our business."

Discovery Toys has gained widespread acclaim for its children's products that offer more than just entertainment. Each product is designed to stimulate mental growth among children, from newborns through age 12.

An example is the Hide Inside soft box filled with sounds, shapes and textures. Each element of this toy serves a function, from building auditory and tactile skills to stimulating thinking and learning. Other popular products and recipient of dozens of parenting organizations' awards that eToys will carry include the Discovery Toys Super Marbleworks, Measure Up! Cups and Hammer Away.

"For more than 20 years, Discovery Toys has been creating products that inspire, challenge and provoke mental stimulation among children," stated Tom Zimmer, president and COO, Discovery Toys. "Our relationship with eToys fulfills our strategy to strengthen and broaden the Discovery Toys brand. Consumers now have access to our award-winning products through the traditional in-home demonstrations, and also through the Internet."

The new Discovery Toys Boutique at eToys.com, which opens early November, allows parents to easily find products by age, developmental benefits, bestsellers or award winners. Developmental benefit areas include: Thinking and Learning; Creativity; Auditory; Visual; Tactile; Motor Skills; Language; Logic and Reasoning; Social and Emotional; and Life Skills. Within the developmental benefit areas there is further information to help define what these sections cover, such as "cause and effect relationships" or "problem solving."

eToys not only broadens the national audience, but presents the Discovery Toys product line in a manner that addresses the needs of parents and children. Other helpful sections will include information on products for children with special needs, how Discovery Toys ages its products and ways to determine a child's learning type.

About Discovery Toys

Discovery Toys, based in Livermore, is the leading direct seller of educational toys, books and software, and sells its products through more than 20,000 Educational Consultants in the United States and Canada.

Founded in 1978, the company's two-fold mission is to enhance the lives of children by providing developmentally appropriate products that make learning fun, and to offer parents flexible career opportunities that allow them to stay at home with their children. Its relationship with eToys broadens the opportunity for Discovery Toys to reach new customers through the Internet.

About eToys

Based in Santa Monica, eToys Inc. (www.etoys.com) (AOL keyword: eToys) 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 relationship with Discovery Toys will be successful or that it 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 and 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.