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Twas the night before Christmas, and Furby Baby had still not arrived. Nor, for that matter had Gator Golf, Miss Party Surprise or any of the other items I had ordered for my daughter from the Toys R Us website. Not a creature was stirring on the customer-service phones either, except a recorded message that told me operators were swamped and then promptly disconnected me.

After rushing to a local toy store to score a Furby Baby ("It's the last one we have," the shopkeeper said apologetically, "and it's a little homely."), I finally got angry — and disillusioned. Toysrus.com's failure as a punctual Santa had shattered my faith in online shopping — a service I'd once considered a parent's best friend.

To be fair, Toysrus.com wasn't the only Internet toy store that played the Grinch last year — KBKids.com and eToys.com also delivered some of their Christmas orders after Dec. 25. But Toys R Us was, to its credit, the first to admit failure and offer recompense to miffed parents (in the form of $100 gift certificates). As a result, "we were totally slammed," says John Barbour, an affable Scotsman who has been CEO of the Paramus, N.J., company since the summer of 1999.

The tears from disappointed children have dried, but other repercussions linger, including a class-action lawsuit against Toysrus.com and fines levied by the Federal Trade Commission on online retailers that made promises they didn't keep. But money seems a small price for ruining Christmas. What on earth does Toys R Us have to say for itself?

For starters, the company blames a host of "technical problems" with the 6½ miles of conveyor belts at its Memphis, Tenn., warehouse. But the bottom line is, Toys R Us was simply overwhelmed by an unexpected blizzard of orders. In 1998 online stores did $3.1 billion in holiday sales; last year that number jumped to a whopping $7 billion, and Toys R Us — a company new to e-shopping — just wasn't ready. "We had the capacity, we had the product," says Barbour, sounding like the losing coach in last year's Super Bowl, but in the complex chain of automation at the warehouse, "if just one thing fails, shipping can stop for two or three hours. Eventually, it starts to add up."

He swears that much has changed since Santa last ventured south. In August Toysrus.com announced that it had struck a deal with Amazon.com to create a joint toy-selling site. Amazon will be responsible for maintaining the website and fulfilling customer orders — the very tasks that tripped up the toy seller last year. Meanwhile, Toys R Us will continue doing what it knows best — buying and managing inventory. Since mid-September, anyone who has typed in the Toys R Us URL has been directed to the joint site. There they find the sort of special features that Amazon is known for, like personalized recommendations and product reviews.

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