Shutterfly buys out Memory Matrix

Shutterfly on Wednesday announced its takeover of Memory Matrix, an engineering company focused on digital photography.

Under the terms of the deal, Memory Matrix technology and intellectual property will be integrated with Shutterfly products, according to Shutterfly, an online photo service based in Redwood City, Calif. Financial details were not disclosed.

Lou Montulli, co-founder and CEO of Memory Matrix, will join Shutterfly as vice president and report to its chief engineering officer, Jeannine Smith, Shutterfly said. One of the founding engineers of Netscape, Montulli wrote the text Web browser Lynx at the University of Kansas and developed Hypertext Transfer Protocol (HTTP) cookies--text files stored on a browser that form a profile of that user's Web activities and can include other user information.

"This strategic acquisition affords Shutterfly the ability to more aggressively innovate our products and services," Shutterfly CEO Jeffrey Housenbold said in a statement. "By integrating Lou Montulli and the Memory Matrix team into Shutterfly's accomplished engineering organization, we've assembled an engineering powerhouse."

The online photo-service market has several players, including Kodak's EasyShare Gallery (formerly Ofoto) and Webshots, which is owned by CNET Networks, publisher of CNET News.com. Hewlett-Packard also entered this segment recently with a deal to acquire Snapfish.