HP to acquire Snapfish to bolster their online photo capabilities

HP has announced today that they have entered into an agreement to purchase Snapfish, an online photo service.  It looks like a great move for both organizations.  HP has a great reputation for printing, but seems to be lagging behind other companies like Kodak, Shutterfly, and Yahoo when it comes to online photo services.  Snapfish has a large subscriber base and offers many services not only to customers but to retailers as well.

With what we've heard from Kodak and the recent New York Times article, there is a large push for companies to get into the online photo service market.  Whether it's providing kiosks or an online service, there is a lot of money to be made by printing digital images.  With an increasing number of camera phones and mobile services for the camera phones, providing an easy way to order prints of camera pictures, for example, sounds like a sure win.

HP has proved themselves in the home printing and paper marketplace, but to date they have not been a player in online photo services arena.  Snapfish currently has 13 million subscribers and they're growing by 500,000 members a month.  This growth is attributed to their high rate of customer satisfaction - 90% of their customers have recommended the service to others.

Snapfish offers free online photo sharing, photo storage and management, free editing tools and software, online print ordering, wireless imaging services for camera phone and color handset users, and more than 70 personalized photo products, such as calendars and mousepads.

In addition to end-user services, Snapfish also provides infrastructure services to leading retailers, internet service providers and wireless carriers, allowing them to offer these same products and services to their own consumers. Snapfish is the default imaging service to all of Cingular's mMode camera phone users. Snapfish also has contracts with ISPs like Juno, NetZero and Comcast, as well as electronics retailers such as Circuit City.

Ben Nelson, CEO of Snapfish, will run the new division at HP.  Both HP and Snapfish are emphasizing that for current Snapfish users, their services will only get better with an expanded offering from HP's digital photography portfolio.  Also, they are ensuring that current customer's information will remain safe and secure.

The agreement is expected to be finalized in April of 2005.