Press Releases Oct 15, 2002

BEST BUY AND SHUTTERFLY TEAM UP TO SELL DIGITAL PHOTOFINISHING PRODUCT

REDWOOD CITY, Calif. – (October 15, 2002) — Shutterfly, the leading online photo service, today announced a joint program with Best Buy Co., Inc. (NYSE: BBY) to sell its first retail product in Best Buy’s more than 500 retail stores in 48 states. The announcement reflects a broadening of the alliance between the companies, who have been working together to make digital photography more accessible to customers since the creation of the BestBuy.com Photo Center powered by Shutterfly in 2000.

Beginning this week, customers who spend more than $49 in a Best Buy store have the option to purchase a $25-value Prepaid Print Card for $9.99, which credits them with high-quality 4×6 prints redeemable at the BestBuy.com Photo Center. “Digital cameras and related products are some of Best Buy’s most popular sellers, especially for the holidays. In fact, Dataquest research shows that 50 percent of U.S. households will own a digital camera by 2006,” said Scott Bauhofer, senior vice president and general manager of Online Stores for Best Buy. “We are delighted with the print card offering because it gives customers an easy solution for receiving film-quality prints from a digital camera.”

Additionally, Shutterfly and BestBuy.com will include a special offer in shipments to all customers who make a purchase on BestBuy.com (excluding music and movie sales) during the holiday season. Customers will receive a coupon for 15 percent off any order of prints or photo products from the BestBuy.com Photo Center.

“A major hurdle for the digital imaging industry has been the absence of an industry-led education initiative to drive consumer awareness about the benefits of the digital world — our program with Best Buy clearly fills that void,” said Andy Wood, Shutterfly’s CEO. “Shutterfly’s relationship with Best Buy offers an exciting opportunity to grow the digital market both on- and offline.”

In addition to high-quality prints, the BestBuy.com Photo Center offers a range of photo products, including personalized greeting cards, custom photo wall calendars, photo note cards, mini-albums called Snapbooks and more. It also offers users unlimited free storage, free online sharing, as well as tools to organize and enhance photos such as red-eye fix, cropping, color tones and hundreds of decorative borders for the holidays, birthdays, weddings or any occasion.

About Shutterfly
Shutterfly, the leading online photo service, leverages its proprietary technology and understanding of its customer to develop personalized, quality photo products and services that make it simple and fun for people to stay connected to those who matter most. Film and digital photographers alike can enjoy the benefits of Shutterfly’s photo services, including high-quality prints, image enhancements, personalization, free online storage and picture sharing. Customers can add custom text to the back of prints and transform their pictures with special effects and borders as well as create photo cards, invitations, calendars and Snapbooks(tm), all of which can be mailed anywhere in the world. Shutterfly is consistently recognized for its photo quality and innovative features, and was most recently rated best overall online photo service in a field of twelve by MacWorld in its June 2002 issue. Shutterfly is based in Redwood City, CA. For more information, visit www.shutterfly.com.

Media Contacts:
Whitney Brown
Shutterfly
650-610-3519
wbrown@shutterfly.com

Donna Beadle
Best Buy Co., Inc.
925-995-5259
donna.beadle@bestbuy.com

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Shutterfly, Shutterfly.com and Snapbook are trademarks of Shutterfly, Inc.