Mattel is using technology to create a new twist on a 48-year-old toy to appeal to today's Web-and multimedia-savvy girls.

On Thursday, Mattel unveiled Barbie Girls, four-and-a-half-inch tall MP3 players designed to look like dolls. The devices turn into live characters at, a new Web site where girls can interact with one other in a manner reminiscent of Second Life, the virtual world for adults.

The company hopes the new toy, which brings together Web surfing, shopping and music downloads, will cool demand for rival MGA Entertainment's sassy Bratz dolls -- a line of big-headed, skinny dolls with scant, trendy clothing.

The world's largest toy maker is also taking aim at Apple's iPod music players and Ganz's Webkinz, furry animal toys that come alive online.

The official launch of came a week after the company gave it a public test run.

Toy analysts say this latest addition to the Barbie line, launched in 1959, should be a hot seller, helping the brand reverse nearly five years of declining sales.

"If Mattel's online community is successful -- with penetration similar to Webkinz -- we estimate maximum annual sales potential of about $100 million, or about 3 cents a share," Oppenheimer & Co. analyst Lisa Bolton Weiser wrote in a research note.

Retailers said earlier this month that demand for Webkinz, which are sold at specialty retail shops such as Hallmark and American Greetings, has skyrocketed.

The Barbie Girls music players, which can hold up to 120 MP3 or 240 WMA-file songs, come to market in July and will cost about $60, Mattel said.

"I think we've got a hit on our hands," said Reyne Rice, a New York-based toy trends expert at the Toy Industry Association. "You've got music, you've got fashion and you've got online--all these components tied into today's girls."

At, girls can customize their characters' looks and styles. They can also go to the online mall and shop for clothes, accessories and furniture for their online room. They can even adopt a pet.

To ensure girls' safety in public chats, Mattel devised a limited vocabulary of 2,000 words the girls can use on the site, designed to prevent use of sexual language, profanity or hurtful words such as "stupid" or "hate".

Filters also prevent children from giving out personal information including names, phone numbers or even the cities where they live. Only in private chats with a "best friend" can a girl divulge personal information.

Mattel said it ensures that the girls are close friends by requiring one of them to physically connect their Barbie Girls MP3 player to a friend's computer.

Each element of Barbie Girls -- from safety to music -- is designed to help Barbie win back market share from the brash Bratz line, said independent toy industry consultant Christopher Byrne.

"After the implosion of Lindsay Lohan and Britney Spears," Byrne said, "Barbie seems like this wholesome, wonderful thing now. Bratz really got a lot of momentum from tying into those people."