REDWOOD CITY, CALIF. – (June 1, 2005) — Shutterfly, Inc., the leading independent e-commerce company, specializing in digital photo products and services, today announced the acquisition of Memory Matrix, Inc., an advanced engineering firm dedicated to improving the consumer digital photography experience. With the acquisition of Memory Matrix, Shutterfly will incorporate the company’s intellectual property, product rights and industry-leading engineering team. Lou Montulli, co-founder and CEO of Memory Matrix, joins Shutterfly as a Vice President reporting to Jeannine Smith, Shutterfly’s Chief Engineering Officer.

Prior to launching Memory Matrix, Lou Montulli was a founding engineer and the director of server engineering for Epinions.com, which is now Shopping.com (NASDAQ: SHOP). Earlier, Montulli was one of the founding engineers of Netscape (now an America Online, Inc. brand), where he led the networking group and developed the networking code as well as many of the back end subsystems. Prior to that, Montulli wrote the text web browser Lynx while attending the University of Kansas. Lou Montulli is the inventor of several innovations on the web including HTTP cookies and holds multiple patents.

“This strategic acquisition affords Shutterfly the ability to more aggressively innovate our products and services,” said Shutterfly President and CEO Jeffrey Housenbold. “By integrating Lou Montulli and the Memory Matrix team into Shutterfly’s accomplished engineering organization, we’ve assembled an engineering powerhouse. And through our ongoing search for top engineering talent, we will continue to deliver new compelling ways to preserve and share memories.”

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About Shutterfly
Founded in 1999, Shutterfly, Inc. (www.shutterfly.com ) is a premium photo service specializing in the consumer and professional photography markets. The company provides customers with simple and fun ways to organize, enhance and archive images; share pictures with family and friends; order professional-quality prints and create an assortment of personalized items such as Photo Books, Calendars and Greeting Cards. In 2005, Shutterfly ranked no. 170 on the 24th annual Inc. 500 list of the fastest-growing private companies in the country.

Shutterfly, Shutterfly Collections and Shutterfly.com are trademarks of Shutterfly, Inc.
Media Contacts:
Bridgette Thomas
Shutterfly
(650) 610-3519