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Live from Studio 1A: Web-what?

Coming in this morning and looking at the stories of the day, one title stuck out:  Webkinz.  Huh?  What's that?  After reading some of the producer's notes and then watching the segment, I have quickly learned that in my day it was Cabbage Patch Dolls, then it was Tamagotchi followed by the Beanie Baby craze, and the newest toy fanatics are now combing stores for Webkinz: fluffy, innocent-l

Coming in this morning and looking at the stories of the day, one title stuck out:  Webkinz.  Huh?  What's that?  After reading some of the producer's notes and then watching the segment, I have quickly learned that in my day it was Cabbage Patch Dolls, then it was Tamagotchi followed by the Beanie Baby craze, and the newest toy fanatics are now combing stores for Webkinz: fluffy, innocent-looking plush toys.  No creepy robotic voices, no computer screens on their stomachs, these stuffed animals could be mistaken for any others in your child's room.  The secret to their popularity lies in the unique code that each has that allows its owner to log on to the Webkinz website and create a virtual world for his or her new toy.  WATCH VIDEO.

One of the most striking things about this new fad to me is that it gets kids at a very young age on the computer dealing with things like budgeting Webkinz money, supplying food for the pet and becoming part of a rapidly growing online community.  Clearly some of these lessons are valuable for children to learn - but are there downsides to learning online instead of getting a weekly allowance or playing general store with other kids?

One pitfall clearly lies in the addictive nature of computer games and activities - kids are spending more and more time indoors looking at a screen and less time playing outside or using their imaginations with other children.  One of our senior producers mentioned that she has had to limit Webkinz time along with setting a limit as to how MANY of the creatures her daughter can own.  As with any new craze, kids are getting competitive with each other over how many Webkinz they have, how much Webkinz currency they have, what toys and accessories they were able to "buy" for their pets, etc. 

At the same time, kids can learn how to be responsible for something and it could also be a good trial run for a real pet.  The Webkinz site familiarizes children with computer software and communication on the web, which is such a crucial part of society at large. 

So is this just the next wave, or is this trend potentially negative?  How much should parents be involved in the online world of their child's toy?  How can parents be sure that kids are safe online at young ages? 

What do you think?