REDWOOD CITY, Calif. (February 12, 2001) Shutterfly, the leading online photo service, and Best Buy Co., Inc., (NYSE: BBY), the leading retailer of digital technology products to consumers, announced today the selection of Shutterfly to create, manage, and market Best Buy’s new Online Photo Center.

The Photo Center will provide an easy way for Best Buy customers to learn more about digital photography and have a place to store, enhance, and print their digital pictures. This online service will be tightly integrated with Best Buy’s more than 400 retail locations through promotions and information provided in the stores. This provides customers with the simplicity and services they need to get the most out of digital photography. Customers will be able to access the Photo Center online at http://photocenter.bestbuy.com, as well as from links within bestbuy.com, beginning Monday, February 19th and in-store early this fall at Best Buy’s retail locations nationwide.

“The photo center is part of BestBuy.com’s initiative to provide new and innovative digital services to its customers,” said Scott Bauhofer, senior vice president and general manager — Online Stores for BestBuy.com. “It is our continuing goal to enhance customers’ shopping experiences at every point where we interact with them.”

Best Buy Photo Center customers will be able to upload their images from a digital camera or mail their 35 mm film in a postage-paid envelope to the Photo Center. Customers will be able to use the Photo Center to transform their images by applying one of the more than 50 custom borders and effects, such as turning a color photo into black and white, adding a simple white border, or enhancing a photo with a special themed border for a new baby, birthday or other special occasion. Customers will also be able to turn their photos into customized greeting cards or have their photos put into high-quality frames and mailed directly to friends and family all over the world.

The alliance comes at a crucial time as digital camera sales and consumer demand for digital photography services continue to grow. The Best Buy Photo Center will offer customers a convenient and creative alternative to traditional photo finishing. Shutterfly’s award-winning ease of use and print quality will provide Best Buy Photo Center customers a service that allows consumers to store, share, print and get creative with their pictures in ways they never imagined.

“Best Buy has established a commanding market share in digital cameras and, industry analysts predict that, the total digital photo finishing market will be a $3.5 billion dollar industry by 2005,” said David Morrish, senior vice president of Merchandising-Computers, Best Buy. “As the leader in online photo services, Shutterfly makes the process simple, accelerating the already rapid adoption of digital photography.”

Jayne Spiegelman, Shutterfly CEO and co-founder said “Shutterfly and Best Buy have built a compelling end to end solution that brings the digital world closer to consumers at the point of purchase whether they are online or at retail. By promoting the photo service with every digital camera sold, Best Buy will be providing their customers with a complete digital solution. Not only do their customers get the best selection of digital camera’s available, they can now easily turn their pictures into 35 mm quality prints, share them with friends, and even create cards and gifts.”

The alliance will include extensive co-marketing initiatives, including point-of-purchase displays and advertised promotional programs. Shutterfly will provide digital photography training programs for retail associates at Best Buy stores nationwide. First-time Photo Center customers will also receive special sign-up promotions. For more information on the Best Buy Photo Center, visit http://photocenter.bestbuy.com.

About Best Buy Co., Inc.
Minneapolis-based Best Buy Co., Inc. (NYSE: BBY) is the nation’s number one specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Enterprise operates retail stores and commercial Web sites under the names: Best Buy, (BestBuy.com), Sam Goody (SamGoody.com), Suncoast (Suncoast.com), Media Play (MediaPlay.com), On Cue (OnCue.com) and Magnolia Hi-Fi. The Company reaches consumers through more than 1,800 retail stores nationwide, in Puerto Rico and the U.S. Virgin Islands.

About Shutterfly
Shutterfly is a new kind of photo service that makes it simple, convenient and fun for people to take and give pictures. With only the Internet and a camera, Shutterfly users can easily enhance, personalize, store and share photos. Most importantly, they can transform their digital pictures into 35mm-quality prints and have them mailed to friends and family, all over the world. PC Magazine recently selected Shutterfly as the best online photo service, granting Shutterfly its coveted Editors’ Choice Award and rating the service “Excellent,” the highest rating available. The privately held company is headquartered in Redwood Shores, California and is backed by Jim Clark, Mohr Davidow Ventures, Adobe Ventures and Tom Jermoluk. For more information about the company, visit www.shutterfly.com

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