Kodak Ups Its Internet Ante

Ratcheting its already extensive Internet involvement up a notch, Eastman
Kodak Co. made an equity investment in PhotoAlley.com and signed a
marketing deal with Circuit City Stores Inc. .

In addition to Kodak’s unspecified equity investment in Photo Alley.com, the
two companies will collaborate on joint initiatives to drive sales of
conventional and digital photography products and services.

Kodak will be the exclusive provider of digital print fulfillment through its
Print@Kodak operation for PhotoAlley.com customers and will provide
PhotoAlley with photo processing, scanning and uploading services through
Qualex, Kodak’s photofinishing subsidiary.

The deal with Circuit City lets Kodak offer co-branded photo album software
and Internet-based photofinishing services in the chain’s nearly 600 stores.
Financial terms of the deals were not disclosed.

Eastman Kodak, which had more than $14 billion in sales for 1999, already
provides a range of consumer digital services, including Kodak Picture Center
Online at CVS.com, Kodak Picture CD, Kodak PhotoNet online, “You’ve Got
Pictures” in cooperation with America Online, and Kodak Picture Disk.

PhotoAlley.com plans to offer online amateur photo galleries and
photo-sharing functionality in conjunction with the new Kodak services.
PhotoAlley becomes an official “e-dealer” of Kodak products, granting the
company the right to sell Kodak digital products in an e-retail store on the
PhotoAlley site.

Kodak will receive a board observer seat as a result of its investment.
Launched in the fourth quarter of 1999, PhotoAlley is an authorized dealer of
top brand cameras, both digital and traditional, and markets peripheral
equipment and supplies.

Circuit City, meanwhile, will market a co-branded Print@Kodak Extra
Value/Starter CD that gives consumers an easy way to create and print custom
picture albums and to order high-quality, durable prints, T-shirts and other
photo products from any source — digital cameras, home scanners or film
pictures that have been digitized.

The CD includes album software from Kodak for creating and ordering Kodak
Picture Pages–durable, double-sided album pages — and $50 worth of prepaid digital
photofinishing services through Print@Kodak, Kodak’s new online
photofinishing service.