In an effort to outduel Bill Gates-owned competitor Corbis, online image provider Getty Images, Inc. (Nasdaq: GETY) announced today that it has completed a $183 million (US$) acquisition of Eastman Kodak subsidiary The Image Bank.
The Seattle, Washington-based Getty financed the cash acquisition earlier this month by selling six million shares of common stock for $39 a share. The deal doubled the size of Getty’s photo and film archive and made it the largest online image provider.
“Now that we have completed our acquisition of the Image Bank, we intend to begin implementing our integration plans immediately,” said Getty Images CEO Jonathan Klein. “Our first priority is to enhance the Image Bank’s e-commerce operations, providing access to more potential markets as well as significant operating benefits.”
Lucrative Digital Image Market
The Image Bank has been an Eastman Kodak subsidiary since 1991. Its extensive image holdings give Getty Images a total of over 60 million photographs and 27,000 hours of film.
Getty Images, which also owns Art.com, sells its images to advertising firms, Web designers, book publishers, newspapers and magazines, corporations and small businesses, and consumers.
Getty Images booked 1998 sales of $185 million, and projects sales of roughly $300 million in 2000. The digital image market is estimated to be worth some $2 billion.
Making the Moves
In addition to the Image Bank acquisition, Getty Images has been busy on a number of other fronts in recent weeks. Earlier this month, the company announced that it was teaming up with the seemingly ubiquitous Japanese Internet company Softbank to form a joint online digital image venture in Japan.
Set to launch in the first quarter of 2000, the venture will be 60 percent owned by Softbank, with Getty Images taking the rest.
The company also recently announced that it was buying a 10 percent stake in LicenseMusic.com and would cross-promote its products with the music licensing company.
All of these moves are part of the fever-pitched battle with Gates and his Corbis venture. Like Corbis, Getty Images is owned by a high-profile entrepreneur, Getty Oil scion Mark Getty.
Some analysts believe that the Image Bank acquisition puts Getty Images firmly in the driver’s seat in its race with Corbis. Gates’ company has focused on selling images directly to consumers, newspapers and magazines.