Press Releases Sep 25, 2001

MICROSOFT AND SHUTTERFLY REACH AGREEMENT TO OFFER CONSUMERS INCREASED CHOICE OF DIGITAL PHOTOGRAPHY OPTIONS IN WINDOWS XP

REDMOND, WA AND REDWOOD CITY, CA (September 25, 2001) — Microsoft Corp. and Shutterfly, Inc. today announced an agreement to offer Shutterfly technology as part of the digital photography experience in the highly anticipated Windows XP operating system. This agreement will allow customers a new option to view, edit and order high-quality prints of their digital images.

“It’s clear Microsoft has made a strong commitment to digital photography with Windows XP,” said Andy Wood, Shutterfly CEO. “Windows XP makes working with digital images extremely simple and we are thrilled consumers will have the opportunity to easily access our award-winning products and photo-finishing services through this platform. At Shutterfly, we share Microsoft’s goal of giving consumers the easiest and most compelling offering to meet their digital photography needs – this partnership meets that goal.”

“Throughout the development of Windows XP, Microsoft has been committed to building technology that interacts seamlessly with industry solutions to deliver an easy-to-use, compelling photo experience to our customers,” said Chris Jones, vice president of the Windows Client Group at Microsoft. “As both technology and consumers become more sophisticated, it’s essential for companies like Microsoft and Shutterfly to strive toward developing the best technology for the broadest use possible. Our collaboration in Windows XP is one that will result, ultimately, in an enhanced experience for the user.”

The agreement will result in Microsoft® Windows XP users having access to Shutterfly’s technology through the Online Print Wizard. Windows XP makes ordering digital photos online extremely easy, and Shutterfly’s service is now an additional option for users when ordering their photos online.

The Shutterfly service offered in Online Print Wizard will take users directly to a version of the Shutterfly website optimized for Windows XP. Once users have completed their order, the Wizard automatically uploads the images to Shutterfly, allowing users to take advantage of Shutterfly’s full range of product and service offerings.

Shutterfly’s photo-finishing services give consumers the ability to order high-quality prints and personalized photo greeting cards from their images for themselves or to be sent directly to family and friends worldwide. Shutterfly also enables consumers to enhance their photos with easy-to-use editing tools, such as red-eye removal and crop, and personalize them with special borders and effects. Users can order a variety of customized products from Shutterfly, including albums with captions called Snapbooks™, invitations, holiday cards, calendars and frames.

About Windows XP
Windows XP – the new standard for efficient dependable computing – gives users the freedom to experience the digital world by building on the momentum of the Internet and digital media with improvements that increase productivity and provide both business and home users with an easy-to-use and exciting PC experience. Windows XP puts the exciting experiences of the digital age at users’ fingertips by uniting PCs, devices and services and brings the solid foundation of Windows 2000 to home PC users, enhancing reliability, security and performance.

About Microsoft
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software – any time, any place and on any device.

About Shutterfly
Shutterfly is the leading online photo service that makes it simple, convenient and fun for people to take and share pictures. Shutterfly enables film and digital photographers to easily enhance, personalize, store and share pictures online or through high-quality prints. Shutterfly users can digitally enhance photo images, and can further transform their pictures with special effects and borders. Shutterfly offers its users features to create photo cards, invitations, calendars and Snapbooks™, all of which can be mailed to friends and family worldwide. Shutterfly is consistently recognized for its photo quality and features, and most recently was named “Best Online Photo Service” by PC Magazine, earning its coveted “Editors’ Choice” award for the second straight year. Shutterfly is based in Redwood City, CA. For more information, visit www.shutterfly.com.

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Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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