Friday, February 23, 2007 - Page updated at 12:00 AM

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Getty enlarges its photo arsenal

Seattle Times business reporter

Getty Images, already the world's largest stock image company, is getting even bigger by swallowing its rivals, making a $200 million bet that demand for celebrity and entertainment photos will grow around the world.

On Thursday, the company said it will pay $200 million to buy New York-based MediaVast, which includes entertainment-photo specialist WireImage.

Getty also confirmed statements that it is negotiating to acquire rival image bank Jupitermedia in a transaction valued at about $350 million, or $9.60 a share.

Seattle-based Getty dwarfs its rivals, with sales of about $840 million expected this year even without the acquisitions, said McAdams Wright Ragen analyst Mike Roarke.

By comparison, Roarke expects sales at rival Corbis of about $275 million and Jupitermedia's at about $140 million. Buying Jupitermedia would give Getty as much as 40 percent of the stock photo market, estimated between $2.5 to $3 billion.

"It's going to just narrow it down to two major players," Roarke said — Getty and Corbis, the private Seattle company owned by Microsoft co-founder Bill Gates.

WireImage will help build Getty's growing editorial photo business, which licenses news, sports, entertainment and archive photos, said Chief Executive Jonathan Klein.

Within that business, entertainment images have been "the star performer," growing by more than 50 percent last year, Klein said.

"Hollywood and the fashion industry check out the WireImage site every morning to see what was shot the night before on the red carpet," he said.

Key photographers and managers at WireImage have signed long-term contracts to stay on with Getty.

Getty decided to pursue editorial photography around 2000 and has quietly grown the business to the point where it is now larger than Reuters or The Associated Press, Klein said.

It will now embark on new ventures such as video and podcasting with help from MediaVast, Klein said, and it plans to use its e-commerce platform to make MediaVast's U.S.-focused business more global.

At the same time demand for editorial photography is growing, the stock photography business has slowed.

Jupitermedia is one of the largest players in the stock image business, with more than 7 million images online. Thursday, the company confirmed it "is currently in discussions with Getty Images, regarding a potential sale of the company to Getty Images. ... "

When asked whether he could confirm those talks, Klein replied, "I think the most I can say is that Jupiter's announcement this morning was fully approved by Getty Images."

If the deal goes through, it would be good for Getty, Roarke said. "By taking them out, Getty will be able to eliminate a lower-end competitor which has been making its presence felt," he said.

Getty Images' other recent acquisitions include iStockphoto for an undisclosed sum, Pixel Images Holdings Ireland for $135 million, and Laura Ronchi, S.p.A. Italy for an undisclosed sum.

Getty still has money to spend, about $340 million in cash this past quarter. But with the field of rivals shrinking, one uncertainty is whether Getty can grow its business without having to continually buy other companies.

An ongoing investigation by the Securities and Exchange Commission into Getty's stock-options practices is also clouding the picture.

Longer term, the business model could be challenged by the proliferation of images generated from ordinary people with digital cameras and the micropayment model — paying a couple of dollars to a photographer over a Web site to use an image, rather than paying hundreds of dollars to a company like Getty to license it.

Getty's stock closed Thursday at $55.36, down 70 cents, from a high of about $95 in late 2005, reflecting "a lot of questions out there about how the whole industry going to work," Roarke said.

Kristi Heim: 206-464-2718 or

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