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With Jim Clark in the Picture, Shutterfly Could Really Click The legendary Net entrepreneur's clout might be even more of an advantage to his new digital photo service than the startup's print technology The latest venture by Internet entrepreneur extraordinaire James H. Clark has been sprung. On Dec. 13, Shutterfly, an Internet service that prints and stores photos taken with digital cameras, made its debut. Like other companies Clark has founded, including Netscape, Healtheon, and myCFO, Shutterfly is targeting a potentially large market. But unlike its stablemates, Shutterfly has competition right out of the gate. It's no wonder. The market Shutterfly is targeting is beginning to take off. Analysts expect sales of ever more popular digital cameras to skyrocket. According to market researcher International Data Corp., the number of digital cameras sold is expected to hit 22 million by 2003, up from 4.7 million this year. That's compares with 16.4 million regular cameras sold in the U.S. last year, according to the Photo Marketing Assn. BETTER PRINTS. What's the appeal? For starters, consider the increased control you have over photo composition. Digital cameras give you the chance to take a picture and see what it looks like -- before you have to choose which version you want to print. That means if you don't like a picture you've taken on Christmas morning, you can keep trying different poses until you get the right one. And digital photos can be shared online via e-mail or posted on Web sites. Wedding guests, for example, can see all the photos that were taken, right away, without having to wait for the bridal book. But getting good quality prints from digital photos hasn't been easy. Until recently, few printing houses did the type of quality printing for digital photos that is available for regular film. Most people who had digital cameras used them primarily to share pictures online or through e-mail. The quality of computer prints has been lower than with traditional paper photo prints from film. Another method of printing out digital photos has been to scan film photos, to digitize them, then use those digitized photos to print out multiple prints.
Shutterfly is launching amid a crowd of competitors. Eastman Kodak offers a group of services, such as scanning photos so they can be shared online; its PictureCD, which lets you store negatives on a CD; and Quick Print, its online digital photo processing service. On Dec. 6, another rival, PhotoAccess.com, debuted with an online service that outsources the photo finishing process to partner District Photo. That was quickly followed by the Dec. 13 launch of ofoto.com, which offers many of the same services Shutterfly does. So how does Shutterfly hope to stay ahead of the pack? First, it already has $13 million in funding in the bank and another round on the way. This early in the game, the company knows that building brand will be just as important as partnerships and good customer service, and it's aiming to do both traditional and online advertising. Shutterfly plans to partner with manufacturers and online and offline retailers, offering promotions -- such as 50 free pictures when someone buys a digital camera. "It's a huge market, and there is a lot of room," says analyst Lia Schubert of Boston-based InfoTrends Research Group Inc., which follows the imaging business. IMAGING VETERANS. While Shutterfly can't boast first-mover advantage, it does claim to have other winning cards. Founded in June, the company has developed the technology to let it print, cut, and ship photos within 24 hours. Since digital cameras take different resolution photos, Shutterfly has also developed a technology that automatically "calibrates" each print to improve the color and to correct any blemishes, such as red eyes. That also allows it to add touches like personalized messages on the back of the photos. Shutterfly cites management as another high card in its hand. The company's founders, Eva Manolis and Daniel Baum, come from the world of digital imaging, having worked at two of Silicon Valley's early innovators, Silicon Graphics and Live Picture. To get the right consumer touch, Jayne Spiegelman, who had been senior vice-president for merchandising and marketing at electronics retailer Good Guys, was hired as CEO. At Good Guys, Spiegelman developed marketing and merchandising strategies aimed at selling more sophisticated products like digital cameras and camcorders. But its ace in the hole is having Clark as chairman. "I think a lot of people will get very excited about Shutterfly because of the management team and the backing of Jim Clark," says Lia Schubert. "His name is synonymous with hot companies and this will get a lot of potential partners excited." In the congested world of e-commerce, that could prove to be very important indeed. Green covers the Internet for Business Week. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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 WEB POINTERS Click here to visit the sites mentioned in this column: Shutterfly Club Photo PhotoPoint Kodak PhotoAccess ofoto.com | |||||||||
