In March Amazon.com severed ties with Toys “R” Us, and stopped selling this brand through its website. The latter had claimed that Amazon had broken an exclusivity agreement with it by allowing other toy sellers to display and retail their products on the web site. Amazon decided to launch its own toys and babies stores.

The Seattle-based Amazon announced that the new toys and baby stores will be hosted on Amazon.com, but will offer third party items like those from eToys, Target, the Discovery Channel Store and Babystyle. Jeff Bezos, founder and chief executive of Amazon.com was delighted to be able to launch these new stores, “We are incredibly proud of our new Toy and Baby stores. We’ve never been able to offer our customers this much selection. We think this is a winning combination that will benefit our customers for years to come.”

According to the available details, Amazon will offer free shipping to people spending more than $25. Amazon spokeswoman Patty Smith elaborated on the new stores and said they now offered two times the selections than what was available with Toys “R” Us. “At that time, we didn’t have the expertise in the toy category that Toys ‘R’ Us had, and Toys ‘R’ Us didn’t have the expertise in online retail,” Smith said. “In the intervening six years, we have gained that experience.”

Although Amazon remains bullish about the new stores, it admitted in a Securities and Exchange Commission filing that it could lose as much as $50 million in fees the parting of ways with Toys “R” Us.

Analysts had mixed reactions to Amazon’s new launch. Scott Devitt of Stifel, Nicolaus & Co felt the arrangement suited both Toys “R” Us and Amazon. “Toys ‘R’ Us has the capacity to go out and manage its own business and brand … and Amazon has the capacity to increase its product offering to more merchants,” he said. However Steve Weinstein of Pacific Crest Securities said it could mean short-term losses for Amazon. “In the near term, there’s a negative fallout,” Weinstein said. “Toys ‘R’ Us was a significant partner … but over time, Amazon could have a broader toy offering.”