SHUTTERFLY AND SCHOLASTIC MEDIA ANNOUNCE LICENSING AGREEMENT

REDWOOD CITY, CALIF. — (September 6, 2006) — Shutterfly, an Internet-based social expression and personal publishing service, today announced a licensing agreement with Scholastic Media, a division of Scholastic Inc., the global children’s publishing, education and media company, to create and distribute a line of Photo Books that will feature the beloved children’s character, Clifford The Big Red Dog®. Marking the first time Shutterfly has incorporated licensed characters into its product line, the new Clifford-themed Photo Books enable customers to create personalized books by adding their pictures into thematic backgrounds featuring Clifford The Big Red Dog. Exclusively available at Shutterfly, the Clifford Photo Books encourage family story telling and photo sharing with young children.

“The fact that Clifford is Shutterfly’s first license speaks volumes to the appeal and power of this beloved character,” said Leslye Schaefer, Senior Vice President, Marketing and Consumer Products for Scholastic Media. “Shutterfly has created an amazing line of photo books that will capture families’ memories in a great new format. We’re thrilled that Clifford will be a part of these cherished moments.”

The new Clifford The Big Red Dog Photo Books come in two square formats: the 8×8 Story Book and the 12×12 Memory Book. As with all products in Shutterfly’s award-winning Photo Book line, Clifford-themed Photo Books are easy to create. Customers simply drag-and-drop their favorite pictures into Clifford-themed page layout templates and add captions to create their own original story. And now for the first time, Shutterfly customers have the opportunity to personalize the front and back covers of their Photo Book with pictures and captions and add a title and date on the spine.

Introductory prices for Shutterfly’s Clifford The Big Red Dog Photo Books start at $34.99 for the 8×8 Story Book and $59.99 for the 12×12 Memory Book. For more information on Shutterfly’s new Photo Books, visit www.shutterfly.com/photobooks

Clifford Snapshot

Clifford The Big Red Dog is a “bone”afide children’s literary classic. Written by Norman Bridwell and first published by Scholastic in 1963, there are now more than 100 million Clifford books in print. In fall 2000, everyone’s favorite BIG red dog made his TV debut on PBS KIDS and the animated series rapidly became one of today’s biggest hits. The top-rated show has received numerous accolades, most notably multiple Daytime Emmy Award nominations and the Humanitas Prize in the children’s animation category for a groundbreaking episode about disabilities. A spin-off chronicling Clifford’s “puppyhood,” Clifford’s Puppy Days&#8482, premiered on PBS KIDS in fall 2003, and garnered its first Emmy Award in 2005 for Henry Winkler’s performance as Norville, Clifford’s city bird friend. Clifford’s Puppy Days has also been recognized with a Parents’ Choice Approved Seal. In 2004, Clifford jumped to the big screen in his first theatrical release, Clifford’s Really Big Movie. There is also a Clifford LIVE! tour giving performances all over the country as well as a traveling museum exhibit, Adventures with Clifford The Big Red Dog, that is currently at The Children’s Museum in Seattle until January 2007. Clifford’s two web sites on scholastic.com/clifford and on pbskids.org combined receive more than 20 million page views monthly.

About Shutterfly

Founded in 1999, Shutterfly, Inc. (www.shutterfly.com) is an Internet-based social expression and personal publishing service. Shutterfly provides a range of products and services that make it easy, convenient and fun for consumers to upload, edit, enhance, organize, find, share, create, print and preserve their digital photos in a creative and thoughtful manner. Shutterfly and Shutterfly.com are trademarks of Shutterfly, Inc.

About Scholastic Media

Scholastic Media (SM) is the entertainment and media division of Scholastic Inc., the global children’s publishing, education, and media company. A proven leader and innovator in the children’s entertainment landscape and award-winning licensor and marketer of children’s properties worldwide, SM ranks as one of the foremost producers of quality, family-oriented content for all platforms including television programming, feature films, home entertainment, interactive, and the Internet.

About Scholastic

Scholastic Corporation (NASDAQ: SCHL) is the world’s largest publisher and distributor of children’s books and a leader in educational technology. Scholastic creates quality educational and entertaining materials and products for use in school and at home, including children’s books, magazines, technology-based products, teacher materials, television programming, film, videos and toys. The Company distributes its products and services through a variety of channels, including proprietary school-based book clubs, school-based book fairs, and school-based and direct-to-home continuity programs; retail stores, schools, libraries and television networks; and the Company’s Internet site, www.scholastic.com.

Media Contacts:

Shutterfly
Bridgette Thomas
650.610.3519
bthomas@shutterfly.com

Scholastic
Brian Reinert
Bender/Helper Impact
212.689.6360
brian_reinert@bhimpact.com