Walk into any mall gift shop that sells plush animals and mugs that boast "World's Best Teacher," and you'll likely come across products by Ganz. Until recently, the Toronto-based company was known for articles du fromage such as little wooden signs that welcome visitors to one's garden and pillows that claim A Mother's Love is Forever, yet these days, parents know Ganz by a different name—Webkinz.

For those in the child-free set, Webkinz are the hottest toy in the world right now—a craze reminiscent of Cabbage Patch Kids, Tickle-Me-Elmo, Neopets, and Tamagotchi. The creators of Webkinz had the brilliant foresight to combine a cute plush toy with a web-based social network-like element called Webkinz World. To access Webkinz World, kids need the secret code that comes with the stuffed toy, and when logged-in, users can "adopt" their pet by creating an avatar and buying food, clothing, and accessories to decorate its online bedroom. Other Webkinz owners can chat with each other safely using hundreds of pre-contructed phrases.

Another stroke of genius was to allow children to accumulate "KinzCash" by poking around and participating in Webkinz World via online games and quizzes. Kinzcash enables the purchase of more accessories to decorate one's World, and with limited editions of certain plush pets à la the Beanie Babies model, the toys have become highly collectible—for kids because they can accumulate many more points, and for adults because they can flip them on eBay for many times their original retail value. As it stands today, more than two million Webkinz toys have been sold, and Webkinz World gets about 3 million unique hits each month and 72 million page views—a thousand percent increase from a year ago. With children firmly enmeshed in the virtual world of their real-life toy on a daily basis, there is no sign of the fad slowing down.

Webkinz was an immediate success when it launched about two years ago, but it has now snowballed into the envy of the toy industry. This, of course, has spawned a slew of copycat toys, as well as web portal enhancements for existing dolls, like BarbieGirls.com and Be-Bratz.com. A regular Webkinz toy retails for about $15 and targets the 8–12 age range, while the new, smaller Lil'Kinz products are a few bucks cheaper and meant for 5–8-year-olds. With the plushies consistently selling-out, parents are warned that the holiday season could end in tears.

The questions some parents have involve how long their child should be spending online and whether online social networking is appropriate at such an early age. Still, the toy has earned acclaim from experts, and aims to instruct kids on responsibility through activities like budgeting their KinzCash, and, of course, buying new elements for their Webkinz World. Like Tamagotchi, the Webkinz pet can get "sick" if neglected, and needs to be nursed back to happiness via online activities—and at the expense of some hard-earned KinzCash.

Concerns aside, Ganz has an obvious smash on its hands. Most fascinating is how a 57-year-old Woodbridge gift company used to selling scented candles and whimsical mugs created a lucrative product that would be the jealousy of the world's leading toy manufacturers. Good on ya, Ganz.

Webkinz World image via Webkinz.com; toy image via Indigo.ca