Shutterfly acquires WMSG for $6 million

Silicon Valley veteran photo site picks up digital marketing print business to continue growing

Photo publishing and printing service Shutterfly announced Tuesday that it has paid $6 million in cash to buy assets of WMSG Inc., a digital marketing company in the printing business. As part of the deal, WMSG President Jim Liszewski will now lead the commercial print initiative at Shutterfly and report to Dwayne Black, senior vice president of Operations.

Founded in December 1999, right before the bursting of the dot-com bubble, Shutterfly is one of the longest standing Web photo sites, with millions of customers having uploaded billions of photos. The Redwood City, Calif.-based company managed to raise $87 million in its September 2006 initial public offering on the NASDAQ stock exchange.

At the close of Q3, Shutterfly reported $49 million in sales, up 21 percent year-over-year from $40.5 million. The company projects its total revenue for 2010 to be between $290 million and $295 million, an at least 18 percent jump from 2009.

Shutterfly says purchasing WMSG will allow it to offer digital print marketing solutions to its customers. Dallas, Texas-based WMSG already creates direct marketing campaigns for several Fortune 500 clients, including Toyota and Dell.

"We're excited to combine WMSG's data management and marketing analytics capabilities with Shutterfly's state-of-the-art manufacturing resources,” said Jeffrey Housenbold, president and CEO of Shutterfly. “Together, we believe we can bring efficient, scalable end-to-end variable digital marketing solutions to direct marketing campaigns of any size and scope."

Housenbold will be speaking at the Citi Investment Research 7th Annual Small/Mid Cap Conference in Las Vegas next Tuesday, November 16.

Shutterfly was not immediately available for comment.