|Kodak to Acquire Leading Online Photo Service Ofoto|
ROCHESTER, N.Y., April 30 -- Eastman Kodak Company announced it has signed a definitive agreement to acquire Emeryville, Calif.- based, Ofoto, Inc. (www.ofoto.com), a leading online photography service. Ofoto will operate as a wholly owned subsidiary of Kodak and will be led by its existing management team, which will report to Willy Shih, president of Kodak's Digital and Applied Imaging unit.
Ofoto will serve as a critical connection between Kodak's film scanning and uploading services and Kodak's output capabilities through labs operated by its Qualex Inc. subsidiary. These capabilities will give customers and consumers unlimited flexibility in storing, sharing, enhancing and printing pictures.
Founded in 1999, Ofoto has 1.2 million registered members. The company offers digital processing of digital images and traditional film, top-quality prints, private online image storage, sharing, editing and creative tools, frames, cards and other merchandise. Ofoto employs 121 people, all based in Emeryville. In a recent report on online photo sharing and photofinishing, ARS, Inc., a business-to-business market intelligence company, ranked Ofoto as the leading online service. Ofoto led in three of the four categories: Ease of Use, Service and Price Competitiveness.
"The acquisition enhances our leadership in the growing market for online photo services. By combining Kodak's and Ofoto's technology, marketing and distribution assets, we will be able to deliver the most comprehensive, easy-to-use online photography services to customers and consumers," said Shih. "This will accelerate Kodak's growth and drive more rapid adoption of online photography."
This move will result in greater speed to market for new features and reinforce Kodak's position as the market leader.
Financial terms were not disclosed.
"Kodak gives us the resources we need to grow Ofoto beyond where it is today and make online photography a mass-market service," said James Joaquin, CEO of Ofoto. "We believe that this acquisition enables us to deliver a more complete service."
Ofoto, together with Kodak's PictureVision subsidiary and kodak.com, will be the cornerstone of Kodak's Internet imaging infrastructure and service offerings. These assets are part of a complete online photography experience—from capture devices and film scanning and storage infrastructure to online services and output media.
Kodak will drive market growth by integrating Ofoto's Web site, infrastructure, e-commerce capabilities and quality digital printing expertise with Kodak's film-scanning infrastructure and network services and Qualex's output capabilities. The company's Web-based applications featured on kodak.com and its established distribution channels will bring more innovative services to the market.
"We anticipate bringing Ofoto's capabilities to our retail customers as soon as possible through the Kodak Picture Center online initiative," said Daniel Palumbo, president, Consumer Imaging, and senior vice president, Eastman Kodak Company. "Combining Ofoto's capabilities with the existing service will provide our retail customers with even richer features and more ways to generate revenue."
According to a report by Nielsen / Net Ratings, Kodak's current Web offerings—kodak.com, Kodak PhotoNet SM Online, the Kodak Picture Center online at CVS.com and the Kodak-sponsored "You've Got Pictures" service offered on America Online—averaged more than 782,000 unique visitors per month for the first quarter of 2001., This makes Kodak's offerings the most highly trafficked photography sites on the Web.
The completion of the acquisition is subject to regulatory approval and customary closing conditions. Kodak anticipates that the acquisition will be slightly dilutive this year.
A conference will be held for news media at 5:00 p.m. EDT. To join the call, please dial (800) 289-0730 and reference conference number 578534 or the Eastman Kodak Company call.
Kodak and infoimaging
The acquisition of Ofoto will help drive the growth of two key infoimaging categories—infrastructure and services / media. Infoimaging is a $225 billion industry created by the accelerated convergence of image science and information technology. Infoimaging unites three closely related imaging markets—devices, infrastructure and services / media—enabling consumers and businesses to more easily use images as a fast and effective way to communicate. Infoimaging presents significant new revenue opportunities for any company that delivers value through the marriage of information and images.
For more information about Kodak products and services, infoimaging or Ofoto, please visit www.kodak.com or www.ofoto.com
Kodak is a trademark of Eastman Kodak Company. PhotoNet is a trademark of PictureVision, Ltd. You've Got Pictures is a service mark of AOL Time Warner.