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Shutterfly Acquires Personalized Book Publisher

REDWOOD CITY, Calif. (June 27, 2007) — Shutterfly, Inc. (NASDAQ:SFLY), a leading Internet-based social expression and personal publishing service, today announced the acquisition of Make it About Me!, a publishing company that produces customized children’s books including My Adventure on Sesame Street and My Amazing Alphabet Adventures.

Now available on Shutterfly, these new adventure books enable children to “star” in their own stories by integrating the child’s picture into the book’s illustrations and storyline. The books only require a single photo; within minutes, parents can create an engaging, personalized and professionally-bound hardcover book to share with their children.

“This acquisition increases Shutterfly’s market leadership in the rapidly-expanding category of personalized storybooks and photo books,” said Jeffrey Housenbold, President and Chief Executive Officer of Shutterfly. “We’re very pleased to offer parents compelling, personalized stories that feature their child together with beloved characters, such as their friends on Sesame Street, and others.”

The acquisition, Shutterfly’s first in 2007, augments the company’s personal publishing platform with the addition of Sesame Street® to a growing stable of licensed content and themed characters, which also includes Thomas and Friends®, Clifford the Big Red Dog® and Angelina Ballerina®. These character-themed photo books are available exclusively at Shutterfly.

“With innovative, educational content such as My Adventure on Sesame Street, we can introduce children to reading in a way that engages and entertains,” said Scott Chambers, Vice President of Publishing, Home Video & Audio at Sesame Workshop. “We are thrilled to partner with Shutterfly, which has continuously shown its commitment to quality and service, as well as the capacity to effectively reach millions of children, parents, caregivers and educators with this wonderful book.”

“We created Make it About Me! to inspire children to explore their world in an educational and fun way,” said Michael Anthony and Jim McCreery, co-founders of Make it About Me! “As Shutterfly incorporates our technology and products into its award-winning Photo Book line, we are excited to see these books entertain, motivate and help educate young readers.”

Financial terms of the acquisition were not disclosed.