Google Acquires Picasa

  |  July 13, 2004   |  Comments

In a relationship-building move, Google acquires digital photography company Picasa.

Google has acquired Picasa, a Pasadena, Calif.-based digital photography company, in a move aimed at further cementing its relationship with consumers. Financial terms of the deal weren't disclosed.

Picasa develops and sells software that lets users to organize and share digital photographs. Besides its eponymous photo organization product, which retails for $29, the company also publishes a free application called Hello. Hello allows users to browse photos in tandem through a peer-to-peer instant messaging-style interface. Both are available in Windows versions only.

In May 2004, Picasa announced a technology partnership with Google's Blogger service to make publishing digital photos on Blogger faster and easier. Google said Picasa users would not experience any interruption in service.

"The primary reason for doing this is to say, 'You use us to search the Web and your email, now you can use us to search your photos and share them with friends and family,'" said Danny Sullivan, a search engine expert who runs the Search Engine Watch Web site (published by the parent of this site).

Google didn't disclose how it plans to integrate the Picasa products into its offerings, saying only that its technologies fit with the company's existing capabilities. "Picasa enables users to easily manage and share digital photographs, and its technologies complement Google's ongoing mission to organize the world's information and make it universally accessible and useful," said Jonathan Rosenberg, VP of product management for Google, in a statement.

"This is another way to lock in the consumer," said Sullivan. "If you've just created your own personal space on the Web and built this area that's tied to you, it's difficult to make you shift. It's hard enough to shift your email, but if you've built your own photo album online are you going to shift it? Not likely."

Concurring, Peter Hershberg, managing partner of search marketing firm Reprise Media, said, "It gives users a reason beyond search to visit Google every day."

The move signals the beginning of a "turf war," according to Fredrick Marckini, CEO of search engine marketing firm iProspect.

"Google is acquiring not just a photographic opportunity but more impressions," Marckini speculated. "All the people looking at photos may likely see Google's contextual ads displayed by their photos. Their integration with Blogger allows them to show a photo and a caption. The caption provides captions, such as 'Here's my friend Julie with her 10-speed Schwinn.' Now we can show contextual ads for Schwinns on blogs."

Gary Stein, analyst for Jupiter Research, owned by the parent of this publication, said the move is "yet another wake-up call to Google's competitors: in case you didn't realize ... Google wants to own consumer online relationships, and they're going to attempt to do so via search."

Eighteen of the company's employees, the majority, are coming to Google, according to a Google spokesperson. The spokesperson did not comment as to the fate of the remaining employees.

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