PhotoWorks to Provide Mail-In Film Development Services for Yahoo!

SEATTLE--(BUSINESS WIRE)--Sept. 21, 2000--PhotoWorks (Nasdaq:FOTO), a leading full service Internet photo company, announced today that it will provide photofinishing services for Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet communications, commerce and media company.

A new film development area on Yahoo!(R)Photos (http://photos.yahoo.com) now gives users access to mail-in film-based photofinishing and online reprint ordering services provided by PhotoWorks.

"This agreement pairs Yahoo! Photos, a leading Internet-based photo sharing site with PhotoWorks, a leading full service Internet photo company, giving Yahoo!'s millions of users easy access to Internet photo services via PhotoWorks," said Gary Christophersen, PhotoWorks President and CEO. "PhotoWorks' services allow Yahoo! Photos users to have their film developed, receive their prints and negatives via mail and have their pictures posted online in a password-protected area on Yahoo! Photos."

"Yahoo! Photos is pleased to offer our users the ability to easily develop film, receive prints and easily access their pictures online for users to view, share and order reprints," said Mark Hull, senior producer, Yahoo! Photos. "We selected PhotoWorks as our partner for mail-in film development and online scanning services based on their strong reputation as a leader in this market, the close relationship they have with their users, and their commitment to high-quality film developing and photofinishing services. Working together with PhotoWorks will make it easier for all camera users to benefit from the variety of services offered online without needing a digital camera or a scanner. Our agreement with PhotoWorks reinforces Yahoo! Photos as a one-stop place on the Internet for all online and offline photo needs."

Pricing and availability

As an introductory offer, Yahoo! Photos and PhotoWorks are offering each customer free processing and prints on their first roll of film. The service is available immediately. Subsequent orders of film processing start at $7.00 for a 24-exposure roll and 25 cents per digital reprint. Online access to photos is provided free of charge for all film processing orders. To sign up for the special starter kit (and for full details), log on to http://photos.yahoo.com, click on the "develop and pick-up" link and follow the simple instructions.

About PhotoWorks

PhotoWorks is a leading Internet photo company dedicated to providing its customers with innovative ways to enjoy and use their photos. The PhotoWorks service provides both traditional and digital camera owners with the easiest way to store and organize photos online, share them with friends and family, and order reprints, photo albums and other gifts.

PhotoWorks draws upon a unique dual heritage as a top-rated photofinisher with over twenty years of experience along with a tradition of innovation and leadership in digital and online photo services. PhotoWorks was the first to offer free scanning, online archiving and e-mail sharing services to both traditional and digital camera users, and hosts the largest consumer online photo archive in the world, currently with over 140 million images.

Based in Seattle, PhotoWorks, Inc. (Nasdaq:FOTO) was founded in 1978. The Company generated $85 million in net revenues over the last 12 months of reported financial results and recently received private investments from Orca Bay Partners and Madrona Investment Group. More information is available at www.photoworks.com or by calling 800/746-8696.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

Statements in this news release concerning leadership in provision of photo services, 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.

Yahoo! and the Yahoo! logo are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

For more information, email info@photoworks.com or call 800/746-8696. Copyright (c) 2000 PhotoWorks.