eToys veteran to operate e-commerce at Park Place

David Strow

Monday, Jan. 21, 2002 | 10:48 a.m.

Park Place Entertainment Corp., making an aggressive push to beef up its Internet offerings, has hired a prominent veteran of the dot-com craze to head its e-commerce efforts.

Frank Han, one of the founders of now-defunct eToys, was named Park Place's senior vice president of electronic commerce.

"Our goal is to become an online leader in the resort, gaming and entertainment industry," Park Place Chief Executive Tom Gallagher said. "That means breaking the mold in marketing our existing resort, entertainment, travel and leisure products to drive new revenue streams and create more choice and convenience for our customers and guests."

Han's job may also one day include building an online gambling site for Park Place, Gallagher said, "where ... legal and appropriate."

But Han said there are more immediate ways Park Place can generate business from the Internet. One of the biggest, he said, has been proven by companies such as Expedia and Travelocity.

"It's not just about online games," Han said. "A lot of the opportunity is in hotel reservations, and making that engine work more efficiently and profitably. The Internet community has already said they want to buy travel online. With our large amount of (hotel room) inventory and brands, we have an opportunity to play in a much more significant way than we are now."

After helping found eToys in 1997, Han helped turn the Los Angeles company into one of the dot-com era's highest fliers. Backed by massive advertising campaigns -- eToys spent about $70 million one holiday season alone on advertising -- the company became the Internet's leading toy store. Sales went from $700,000 in 1997 to $150 million in 1999.

At one point, eToys had a market capitalization exceeding $8 billion -- more than twice the current market value of Park Place.

But eToys posted massive losses -- $148 million in 1999 alone -- and the bumpy 2000 holiday season sent eToys off the rails. Burdened by a huge debt load, and unable to find a buyer for the company, eToys shut down in March 2001 and was liquidated.

"Park Place already has these great brands, and when the time comes to jumpstart our (online) efforts, I have access to a large number of existing customers and I can leverage these brands to acquire new customers, without having to do what dot-coms have to do."

"It's not my walking-in mission to ask for large marketing budgets and spend lots of money," Han added.

But that doesn't mean the gaming industry can't learn from the dot-com world, Han said.

"We're not doing the job we can do (on the Internet), and we think there's a way to move the needle in a big way," Han said. "Part of it is just improving the experience. We'll build stuff that is easier for the customer to use, more helpful, and we'll drive higher conversions."