Stardoll, a virtual environment for teenage girls, has recently announced a partnership deal with JCPenney, one of America's leading retailers, to launch a new line of Stardoll-branded clothing and accessories. The line is to be launched during this year's back-to-school season and it will be available in 300 JCPenney department stores across US as well as on their webstore jcp.com. The partnership is a major deal for Stardoll and a logical extension of their services. Millions of teenage girls have been using the website to create and fashion virtual dolls - bringing a similar experience into the real world can prove to be very lucrative. On top of that, TechCrunch has reported that Stardoll is about to enter a licensing deal with a toy-manufacturer Mattel to produce branded toys from the game. Stardoll is clearly onto something here.

Stardoll network consists of three services: Stardoll.com (the most visited service focused on fashion, fame and interaction), Piczo (a customizable blogging platform they acquired in 2009) and Paperdoll Heaven (a simpler service targeted at younger demographic).  Stardoll was founded in 2004 in Sweden and now all of their services together attract almost 20M unique monthly visitors, mostly girls between 9-20. The start-up raised $10M funding over the years and it is currently backed by Sequoia Capital and Index Ventures. Their revenue stream comes from advertising as well as micro-payments from the game (some of the clothes and features are charged for). With the launch of a clothing line and the Stardoll toys coming out soon, the company is likely to become all the more profitable.

Stardoll Network's CEO Mattias Miksche commented: 'This is a truly exciting venture and we're proud to partner with one of America's most popular department stores to bring the Stardoll fashion experience to life for the very first time'. Executives from JCPenney are equally excited about the deal: 'Given the enormous popularity of Stardoll...bringing the Stardoll brand to life presents an exceptional opportunity to reinforce JCPenney as the first-choice style destination for teenage girls', said Clark McNaught, senior VP. A happy deal all around.

Beyond all the praise and smiles, though, Stardoll has done well for itself. Not only did it manage to mobilize a whole generation of young women and monetize their service, it has also successfully introduced a traditional paper-doll toy into the online environment. Launching the toy back into the real world completes the cycle.