Paper dolls may have been a staple in the '50s and '60s, but had long since fallen out of favor among fashion-conscious girls.

When Swedish startup Stardoll.com wanted to launch an online social networking community for US girls, featuring "virtual paper dolls" as avatars, it realized an emphasis on nostalgia or even traditional advertising wouldn't be enough.

"It knew it needed to take advantage of the power of the Internet to get any kind of serious traction," notes Stardoll.com EVP Matthew ...