Shutterfly (NASDAQ:SFLY) has acquired an online photo start-up, Photoccino, which works on technologies related to photo ranking, analysis and organization. Shutterfly has made quite a few significant acquisitions in the recent past, including Tiny Prints and Kodak Gallery. Photoccino’s image analysis and selection technologies will be integrated into Shutterfly’s entire product line. It will enable Shutterfly’s customers to more efficiently organize and select the best photos and create photo books, calendars, cards and photo gifts using them, thereby improving the user experience significantly, which may help it drive sales of its photo products.
Shutterfly’s CEO said:
“We are focused on developing innovative solutions that make the product creation and sharing process easier for our customers. Photoccino’s best in class technologies solve a common consumer pain point: analyzing and organizing the increasing number of stored digital photos. By combining their intuitive technology with our innovative product offering, we will exponentially improve the creative experience for our customers.”
Shutterfly competes primarily with services like HP’s (NYSE:HPQ) Snapfish, American Greetings’ Photoworks and Webshots brands, and even Apple (NASDAQ:AAPL) that ventured into this business lately, with its new Cards app on iOS. It recently acquired the photo sharing business of Kodak, which was one of its biggest competitors.
We currently have a $44 Trefis price estimate for Shutterfly, which stands nearly 50% above its market price. Its online photo business accounts for nearly all of its value.