PhotoWorks Begins $8 Million Advertising Campaign; Ad Campaign is Part of Aggressive Customer Acquisition Strategy in Emerging Online Photo Services Market

Business Wire, May 8, 2000

Business Editors

SEATTLE--(BUSINESS WIRE)--May 8, 2000

PhotoWorks (NasdaqNM:FOTO), the leading online service for sharing, printing and storing photos, will begin an $8 million television and print advertising campaign designed by the Seattle office of Bozell Worldwide today, part of a major marketing campaign which combines television and print ads, as well as direct mail, online advertising and promotions.

The advertising campaign is part of an increased total marketing budget for PhotoWorks, a company that has strategically moved from its roots in photo processing into the emerging online photo services market. Within the last four months, PhotoWorks has embarked on an ambitious Internet strategy that included acquiring funding from top Internet venture capital firms, changing its name, rebranding the Web site, announcing a partnership with AT&T, and offering additional services to digital and traditional camera users to help them share and store their photos.

"The Internet is going to change the way people use photos, and PhotoWorks continues to lead the category by showing people how easy the possibilities are," said Gary Christphersen, PhotoWorks President and CEO. "The television and print ads truly capture and introduce the simple ways in which the Internet and PhotoWorks can help people share, print and store photographs."

A Media Roadblock

PhotoWorks' media buy begins with a Monday night "roadblock" which means that the advertisement will run simultaneously on major networks including ABC, NBC and Fox and major cable stations including Discover, Learning Channel, CNN and E! The ads will then continue running at various times throughout the summer. Additionally, print ads will be seen in major weeklies such as People, Time, Newsweek, and top lifestyle publications including Better Homes & Gardens and Martha Stewart Living beginning this week.

About PhotoWorks(R)

PhotoWorks.com is the leading online service for sharing, printing and storing photos dedicated to providing innovative ways to expand how people use their traditional and digital images. The service provides both digital and film-based camera users with the easiest way to store their photos online, share them with friends and family, and create photo albums and other gifts. With more than 90 million images archived, PhotoWorks.com is the largest consumer photo site on the Web.

The company draws upon a unique dual heritage that combines over 20 years of experience as a top-rated photofinisher and as a pioneer in both digital and online photography. PhotoWorks brings its experience, the largest consumer photo archive on the Web and a large customer base to the emerging online photo services category. As a result, PhotoWorks has emerged as a leader in the rapidly growing online photo services marketplace.

The PhotoWorks service includes free digital uploads from cameras, free scanning of every photograph (with normal processing fees), Web posting to a private site and lifetime archiving, as long the consumer remains an active customer of PhotoWorks.

Based in Seattle, PhotoWorks, Inc. (Nasdaq NM:FOTO) was founded in 1978. More information is available at www.photoworks.com or by calling 800/345-6967.

Safe Harbor Statement under the Private Securities Litigation

Reform Act of 1995:

Statements in this news release concerning leadership in online photo sharing, Internet-based photo services and digital imaging, changes in how people use, share and preserve photographs, ease of use and any other statement which may be construed as a prediction of future capabilities, performance or events are forward-looking statements, the occurrence of which are subject to a number of known and unknown risks and uncertainties which might cause actual performance to differ materially from those expressed or implied by such statements. These risks and uncertainties include the possibility of delays in the expansion of image storage capacity due to delays in deliveries from suppliers or technical problems; system performance problems due to technical difficulties, system malfunctions, Internet interruptions or other factors; pricing and other activities by competitors; and other risks including those described in the Company's Annual Report on Form 10-K and those described from time to time in the Company's other filings with the Securities and Exchange Commission, press releases and other communications.

Note to editors: All companies and product names are trademarks of their respective owners.

For more information including pictures of the advertisements, e-mail info@photoworks.com or call 800/345-6967.