AOL, Kodak refresh online photo service

America Online and Eastman Kodak are launching a new version of their joint online photo service, "You've Got Pictures," aiming to bolster their position as the market consolidates in tough economic times for dot-coms.

America Online and Eastman Kodak are launching a new version of their joint online photo service, "You've Got Pictures," aiming to bolster their position as the market consolidates in tough economic times for dot-coms.

The service, scheduled to launch Tuesday, features a face-lift as well as free, unlimited storage and the ability to upload pictures from digital cameras and scanners. The service also enables people to drop off their film at a participating Kodak retailer and receive prints in addition to having the pictures delivered to an AOL account.

The AOL deal is important to Kodak, which is trying to prepare its traditional film business for a consumer switch to digital image technology. Kodak faces rocky times, having reported sharply lower profits this month, sparking analysts to reduce expectations for the coming fiscal year.

The updated service comes as AOL and Kodak face dwindling competition in the market for online photo-finishing services.

Kodak acquired online photo service Ofoto in June. Last week, Pantellic Software acquired struggling online photo company PhotoPoint. Zing.com also has hit hard times, closing its consumer operations last month to become an infrastructure provider and laying off 10 to 15 employees out of a total 56.

AOL and Kodak's upgraded service is not groundbreaking, according to Suzzana Ellyn, a research analyst for La Jolla, California-based ARS. She said the companies are "possibly trying to better compete with other online photo companies" such as Shutterfly, which is backed by Netscape Communications co-founder Jim Clark. She said Shutterfly is continuously making modifications and trying to be competitive in ease of use and customer service.

"Even though you're a big name like Kodak and AOL, you've still got to be sensitive to what your consumers want and not assume that just because you're a big name that you're going to capture the whole market," Ellyn said.

Kodak and AOL said their upgraded service is based on consumer feedback regarding better convenience and ease of use. The "You've Got Pictures" service also features a new pricing plan that offers film customers a single price of US$8.99 to receive both prints and online photos.

AOL members using the service will have more options when printing their pictures through the Print@Kodak Internet photo service. The options include ordering reprints and enlargements, such as poster sizes, and creating photo gifts such as mugs and T-shirts.

The companies also said that they are launching a national photo contest, dubbed "My Town", to highlight their upgraded service. AOL members can submit photos that illustrate what makes their hometown special in the summertime.

To kick off the contest, AOL and Kodak will offer a sneak peek at dozens of photos taken by celebrities, such as Edward Burns, Peter Fonda and Melanie Griffith. The celebrity photos will be available for purchase through an auction event on eBay beginning Tuesday.

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