Lego comes from the Danish for “play well”: leg godt. But earlier this past decade, the toy building block company’s products were doing anything but in the marketplace. In 2004, Lego charted a $344 million loss.

It took a new strategy to rebuild Lego, one that involved designing products based on Hollywood blockbusters like Indiana Jones and Star Wars. These tie-ins saved the company.

And while more are reportedly planned, such as a Toy Story line for the June ‘10 release of the third sequel in the Disney movie franchise, Lego is still all about encouraging its customers to use their own imaginations.

Lego’s newly relaunched and rebranded site, Lego CL!CK, reflects this philosophy beautifully. And like the toy itself (and also like so many other companies that have rebuilt their sites to incorporate social networking) CL!CK encourages users to build their own experience by uploading photos, videos and blog posts and by tracking Lego-related tweets.

There’s also sharp original content, like this delightful stop-motion short. No X-Wings here.

And what would a relaunch be without a groovy iPhone app? Lego has one of those too — it turns any photo into a Lego mosaic. [iTunes link]

What’s best about this new approach is that it seems to be all about attracting young Lego fans by showing what old-school fans already know: Lego is a virtually limitless extension of the imagination. Sure, the Death Star has its appeal, but at heart, Lego is not George Lucas.

And that’s a good thing.

Via FastCompany

Lego lightbulb courtesy the Smithsonian