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GETTY EXPANDS TO CONSUMER MARKET
May 12, 1999
Getty Images, Inc. has announced the acquisition of Art.com, a leading provider of framed and
unframed art and art-related products on the Internet.
The Chicago-based company operates in the approximately $9 billion global
consumer art market. This should be compared in size with the roughly $1.25
billion worldwide business-to-business stock photography market.
This acquisition marks the expansion of Getty Images' current online business
into the much larger consumer art market, a move that will significantly
increase Getty's potential customer base and market opportunity. It will
also leverage Getty Images' extensive collection, consisting of more than 30
million images, by making it available to the consumer marketplace through
Art.com.
Art.com has more than 100,000 images online, including works by artists such
as Monet, van Gogh and Picasso, and photographers
such as Herb Ritts and Robert Mapplethorpe.
The company's successful www.art.com web site generated more than 400,000
average user sessions per month in the first quarter of 1999. Sales orders
have increased by more than 40 percent per month since January
1999. Art.com has established itself as a premier consumer art web site on
the Internet, with major merchant partnerships with almost 7,000 affiliate
web sites, as well as the leading online portals, Yahoo! and America Online.
Under the terms of the agreement, Art.com shareholders will receive 4.51
million newly-issued shares of Getty Images common stock. Under certain
predetermined conditions, the shareholders may receive in the future up to an
additional $84 million of consideration, consisting of shares and cash,
depending upon
the value of Getty Images stock at the time of the payment. (Bloomberg News
says this package could total $202 million.) Art.com will
operate as a wholly owned subsidiary of Getty Images and will form the
foundation of the consumer division of Getty
Images.
"We are delighted with the synergies that this acquisition creates for Getty
Images and to Art.com," said Jonathan Klein, co-founder and chief executive
officer of Getty Images. "With this acquisition, we move from leading the
business-to-business market to being at the forefront of both the
business-to-business and
consumer markets. Through Art.com's successful e-commerce web site, we are
now able to reach millions of online consumers, making our wealth of content
available to a much wider audience than before."
The www.art.com web site features proprietary technology that allows
customers to visualize more than one billion custom matting and framing
combinations for their selected print on-screen
before purchasing. It offers a number of value-added services such as the
ArtClique Savers Club, which offers consumers discounts
and special offers; art-care tips with every purchase; monthly feature
galleries; and My Gallery, a personal gallery that can be created, saved and
shared. Art.com also offers Art Print Index (www.artprintindex.com), the art
industry standard for sourcing and buying art wholesale. The site will
continue to add art and
art-related content and services in its quest to provide a vertical hub for
art consumers that is the most inviting destination for discovering and
purchasing art. As part of the strategy, Art.com will be adding a gift
center featuring dimensional art, an art auction and other art-related
products and services.
"The big winners in this deal are the consumers," said Bill Lederer, founder
and chief executive officer of Art.com. "Purchasing art in the analog world
is a time consuming, daunting
process. We believe the initial success of our web site demonstrates that
people want a better solution. Joining forces with Getty Images provides our
customers access to one of the
largest collections of some of the world's greatest art and imagery through
our web site."