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Shutterfly, a 1999 start-up funded by Netscape and Silicon Graphics founder James Clark, is now the leading online photo finishing service, with a 31 percent market share ahead of Eastman Kodak's EasyShare Gallery service and Hewlett-Packard's Snapfish, said InfoTrends analyst Alan Bullock, citing a June report.
Together, the three make up a 70 percent share of the market segment, which is a separate--with some crossover--from photo-sharing sites such as Yahoo's Flickr or Fox Interactive Media's Photobucket.
Online photo-finishing services in the United States are a $600 million business--a figure that's predicted to grow to more than $1 billion by 2011, said Bullock, who focuses on online imaging trends.
That growth comes amid a relative shakeout in the marketplace. Yahoo is about to shut its Yahoo Photos service to better support its Flickr photo-sharing site. And Sony is set to close its ImageStation site and is recommending Shutterfly as an alternative to its users. That might help Shutterfly pick up a percentage point or two in terms of market share, Bullock said.
While the actual printing of photos is a staple service for these companies, they have been tapping into consumer demand for photo-based products, which typically allow for a greater profit margin than do prints.
Shutterfly's most recent acquisition, for example, was a company called Make it About Me, which lets children star in their own customized storybooks alongside Sesame Street characters. Other licensed characters Shutterfly features in its books include Thomas and Friends, Clifford the Big Red Dog and Angelina Ballerina.
Housenbold, who was recruited in 2004 from eBay and has also held executive posts at Internet companies AltaVista and Raging Bull, added that his company is crossing over naturally into the scrapbooking industry with its expanding lineup of photo memory books. A photography aficionado and a former high school and college yearbook staffer, he showed off a shiny book he created via Shutterfly to illustrate his family's recent trip to Jackson Hole, Wyo.
Such customized books have become increasingly popular for all types of consumers, he said, ranging from parents making baby books to families documenting their histories and small businesses illustrating their product lines.
The year-round sale of such memory books and other goods helps Shutterfly and its competitors make up for the seasonal nature of their holiday card business, Bullock added. Other developments for Shutterfly this year include the building of a second printing plant in Charlotte, N.C. (the other one is in Hayward, Calif.), and a retail partnership with Target.
Despite the crazy tale that led up to the ringing of the Nasqaq bell, Housenbold said it was "just a day in the life of the company." He continually reminded staff that, "If you think (the IPO is) the endgame, you're in a whole lot of trouble."
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- What a Pointless Bit of Drivel
- Oh my goodness, hard to imagine a more pointless article on CNET than this one. Uhm, what does some sort of stump tour on a private plane ride have to do with the company. Who cares about ringing the bell and celebrating in manhattan? These CEO fluff pieces are such NONSENSE. What about the people in the printing lab who produce the product that pays for all of the executives to fly around, who are no doubt cashing in their shares right now for more trips to WY and scrapbook supplies? Honestly - what DRIVEL.
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