Fun Is Done for Amazon's Toys R Us Deal

Amazon.com's (AMZN Quote) toy story isn't looking like much fun right now.

Toys R Us (TOY Quote) has sought to renegotiate its alliance with the online retailer, on the grounds that the company was paying Amazon too much and getting too little in return, says a person familiar with the matter. The alliance is key to Amazon's success, because it accounts for much of the Seattle-based bookseller's fastest-growing and most-profitable segment.

In February, high-level executives at both companies met to rehash the deal, according to that person who is familiar with the matter. The meeting included Amazon CEO Jeff Bezos and Toys R Us chief John Eyler, along with several underlings, this person says. One hedge-fund source says the meeting ended with the companies agreeing to reduce Toys R Us' annual payments to Amazon; the companies didn't immediately return calls seeking comment. ...