Shutterfly has acquired Tiny Prints, a company that online publishing company that sells cards, invitations, personalized stationery and photo books. The deal includes $141 million in cash, and approximately 3.9 million shares of Shutterfly common stock. In addition, Shutterfly will reserve approximately 1.4 million shares (valued currently at $60 million) of common stock as consideration for the vested and unvested Tiny Prints employee equity awards assumed by Shutterfly. The entire Tiny Prints team will join Shuterfly.

Founded in 2004, Tiny Prints raised funding from Technology Crossover Ventures and Summit Partners in 2008 and has been profitable since its launch. Through TinyPrints.com and WeddingPaperDivas.com, Tiny Prints offers stylish stationary, greeting cards and more online. Users can pick from a vast variety of styles and customize printed invitations and cards with images, text, and colors.

Personally, I’m a huge fan of the service and have used both TinyPrints and WeddingPaperDivas for holiday cards, thank you notes wedding invitations and more. The company could be a fit within Shutterfly to combine photo sharing and printing with the stationery and printing business.

Shutterfly says that the transaction will close in approximately 30 to 60 days and following the deal, Tiny Prints stockholders will own approximately 12% of the pro forma combined company.

Shutterfly most recently purchased Tiny Pictures in 2009.

As I said, this shouldn’t surprise anyone considering that Shutterly bought Radar parent Tiny Pictures back in September of last year. Shutterfly is much, much larger than Radar ever was, so it makes sense to incorporate the best features of Radar into that product rather than keeping it alive as a standalone service.

“We plan to officially halt the service on Wednesday May 26th at noon Pacific Time, at which point you will no longer be able to access your account or your posts,” says the email.

Radar initially announced that the service would shut down on April 30, but apparently it got a stay of execution for a few more weeks. As they note, a tool has been created to port any pictures you have on Radar over to Shutterfly. Be sure to use it if you want to save your pictures before May 26.

They key to this app is that beyond your regular camera phone pictures, it gives you easy access to both your Facebook pictures (via Facebook Connect), and your Flickr pictures. Once you have those, it takes just seconds to tweak them and send them off to Shutterfly to be printed and delivered to you (or friends) in a special photostrip case. And before that arrives, they send you an email preview of what the photostrips will look like. These strips can also be shared on Facebook and Twitter immediately.

The best thing about these photostrips may be the price. For just $2.50, Shutterfly will print and send these things anywhere in the work. It’s “definitely in the micropurchase category,” the company notes. They are also using PayPal’s new in-app micropayments to allow for you to buy these photostrips (though regular credit card payments are welcome as well). The company is also giving away three free photostrips to the first 50,000 users who download the iPhone app.

The company says it’s working to bring this service to other devices to allow for the same type of easy photostrip making on the go. It also plans to add other effects to the application.

You can find Wink in the App Store here as a free download.

After raising a total of $11.2 million since its founding in 2005, Tiny Pictures sold to Shutterfly on Friday for $1.3 million in cash and another $1.3 million in restricted stock to employees, which has some performance triggers. If you back out the earnout, investors only got back about a tenth of what they put in.

Those investors include Mohr Davidow, Draper Fisher Jurvetson, and angel investors Reid Hoffman, and Joi Ito. The company’s last venture round was $7 million led by Draper Fisher in February, 2008. But Mohr Davidow, which held preferred shares, might have been the only investor to see any of those proceeds at all. Shutterfly disclosed the acquisition in an SEC filing, which only mentions Mohr Davidow as a recipient of some of the $1.3 million in cash.

It also mentions that Nancy J. Schoendorf, a managing partner at Mohr Davidow, sits on the boards of both companies. Although she did not vote on the acquisition, the connection raises the question of whether or not Mohr played a role in bring the deal to Shutterfly in the first place.

Tiny Pictures operates Radar, a mobile photo sharing app which never got a lot of traction beyond a core following. The service is actually pretty slick, centered around a photo commenting stream. You snap photos with your mobile phone which instantly is shared with your friends who also have the app. They can then comment on the photos.

It sounds simple enough, but the app never achieved a critical mass of users. The service is focused more on sharing life moments through photos with people you actually know than creating a public photo stream. So if you don’t know anyone who uses it, there is little reason to join yourself. The friends-and-family aspect must have appealed to Shutterfly, however, which is based on exactly that type of picture sharing. It already has a rich database of people who like to share photos with one another. Radar helps them extend that to mobile phones in a social and fun way.

Update: Tiny Pictures CEO John Poisson confirms that he will remain with the company at Shutterfly as VP, Tiny Pictures. He says that Mohr did not broker the deal in any way and that other preferred shareholders, including Draper, Hoffman, Ito, and himself, also saw some of the proceeds of the sale. As to what he’ll be doing at Shutterfly, he is kind of vague, but it has something to do with mobile social media, sharing photos, and self-expression.

Shutterfly, an online photo sharing and printing site, is adding video capability to its photo sharing sites. Shutterfly is using video hosting site Motionbox to power its video sharing service. So when you upload a video to your Shutterfly Share site, it will also be stored in your Motionbox account. If you upload to Motionbox directly, you will be given the option to post your video to your Shutterfly Share site.

Users can also share videos to social networking sites including Facebook, MySpace, Twitter and Blogger can upgrade for unlimited video storage and HD-quality playback. The free account is a little limiting for storage—you can only upload ten video clips. For $30 per year, you can have a premium subscription which allows higher file size limits, unlimited video downloads and HD-quality playback.

I’m assuming that Shutterfly will monetize the addition of videos by offering customized DVDs of clips. Currently, the company offers users a variety or printing services where users can not only print their photos, but also create cards, mugs, invitations, apparel and more with photos emblazoned on each item. But I’m not sure how else Shutterfly can make money off of the video component.

Shutterfly, which IPO’d in 2006, is playing catch up to other more popular photo sharing sites, like Flickr and Photobucket, which both host video as well as photos. Even Facebook is becoming the go-to destination to share photos and videos. But Shutterfly, a vestige of the dot-com boom and bust, has managed to survive, despite being in an ultra competitive space that’s chock full of similar offerings and products.

When I was looking at traffic numbers for the top photo sites this weekend, another stat caught my eye. Online photo editing site Picnik is also quickly climbing the ranks of photo sites from seemingly nowhere.

In January, according to comScore, the site attracted 6.6 million unique visitors worldwide, a tenfold increase from the year before. On comScore’s list of the largest photo sites, Picnik ranks No. 14, above Shutterfly and AOL Pictures, and just below Snapfish. Unlike those services, however, Picnik is not really a place people store their photos. Rather, it is a place where they touch them up and manipulate them before they post them on MySpace, Facebook, Flickr, Smugmug, or somewhere else.

Picnik is a powerful, cloud-based photo editor that is integrated directly into Flickr, SmugMug and other photo repositories. Competing online photo editors such as Fotoflexer and Photoshop.com (formerly and Photoshop Express) attract only a fraction as many users (1.4 million uniques for Fotoflexer and 760,000 for Photoshop.com.

I asked CEO Jonathon Sposato for more details. He offered that 45 million photos were uploaded in January, and that 45 percent of Picnik’s traffic is direct, 28 percent comes from search engine, and that only 18 percent comes from partner sites such as Flickr and Smugmug. Picnik offers a base version of its photo editor for free, and then tries to convert power users into paying a subscription for more features. While Sposato won’t get into the conversion rate of free to paid members, he says that the percentage is increasing, renewals are increasing as a percentage, and he says that Picnik is now cashflow positive, a little more than two years after launch.

Personally, I use Flickr for my photos and don’t even both with hard-copy anymore. But for those of us who still have a heart and use Shutterfly, you can now pick up your digital prints from your local Target. Today, Target and Shutterfly announced a partnership where you can order prints online for the rate of about 19 cents a photo.

Pickup is said to only take about an hour, meaning you can probably squeeze a rush job out of them if need be, provided you’re willing to pay for it. Says Jeff Housenbold, Prez of Shutterfly:

“This partnership provides a first-of-its-kind retail channel for Shutterfly with one of the nation’s leading consumer brands, and we are delighted to have found in Target the ideal business partner to give consumers the quality experience they expect from Shutterfly,”

Rad. Next time I actually need photos printed, I will keep you in mind Shutterfly. Sounds pretty useful considering there’s usually a Target near everyone.

Shutterfly Offers In-Store Pickup at Target [Digital Trends]

Born in 1999, Shutterfly is a survivor of the last bubble and crash. Now it’s an interesting case for considering other possible valuations. It also gives us a chance to look at what a company with a successful IPO took to market. For comparison, Flickr is rumored to have been acquired by Yahoo! for $30 to $35 million.

After J.P. Morgan, Piper Jaffray and Jefferies sold 5.8 million of Shutterfly’s 23.6 million shares, the company ended the day with a market value of more than $350 million. With about 200 employees it had just under a 34% net profit margin on about $84 million in revenue last year. The company has taken $67 million in VC backing to date. NetScape co-founder Jim Clark, and Shutterfly board chair, bought about 30% of the stock sold today.

In a time when IPOs are among the least common liquidity events enjoyed by Web 2.0 startups, for a photosharing site to remain independent and go public is interesting relative to all the startups we profile here.

Shutterfly is a company that has lots of overhead, faces price cuts from competitors and has no shortage of small startups seeking to edge into its market. It makes much of its revenue from shipping and faces questions around scalability. There’s some interesting analysis over at MrWaveTheory.

While Shutterfly offers more than 150 print and DVD products, photo to print startups like OneTrueMedia, Tabblo and Scrapblog offer more sophisticated design capabilities, more viral online distribution and in some cases prominent media partners. Most photo sharing sites online now allow users to print or burn to DVD their archives, though few of them base their entire business model on printing as Shutterfly does.

What does Shutterfly offer in user experience? A product that clearly appeals to mainstream users.

• Unlimited free storage.
• Good bulk uploaders for both Windows and Mac (though not Intel Mac).
• Public and private albums.
• Group collaboration on shared collections.
• Clean URLs, comments on photos, basic crop, border, red eye removal and color change effects.
• They’ve also got business solutions for resellers.

Its primary competitor, HP’s SnapFish, offers much of the same feature set plus mobile upload by email.

I find everything but site navigation pleasing in Shutterfly. My one complaint as a user is that it doesn’t offer tagging. Album navigation means that one photo can’t be found in more than one group. There’s a reason tagging has caught on recently – it’s really useful and makes an group of pages much easier to move around in.

Will the company succeed now that it’s gone public? It’s hard to say, given even its own concerns about overhead, price competition and an increasingly diversified market. You can’t say that Shutterfly is standing still, though. This new infusion of cash, the contemporary features that it does offer and its already large user base certainly look good.