Getty Images to Acquire Jupiterimages for $96 Million

Posted on 10/24/2008 by Julia Dudnik Stern | Printable Version | Comments (2)

Getty Images and Jupitermedia announced a stock-purchase agreement that transfers ownership of Jupiter’s wholly owned subsidiary, online image-licensing business Jupiterimages Corp., to Getty Images. The aggregate price of the deal is $96 million in cash—somewhere between a third and a quarter of the numbers discussed when last year’s deal between the two companies fell apart for undisclosed reasons.

With the financial advice of Merrill Lynch and legal counsel of Willkie Farr & Gallagher, Jupitermedia’s board of directors has approved the transaction. Though it is still subject to stockholder and regulatory approvals, company chairman and chief executive officer Alan Meckler and several other significant stockholders have guaranteed their votes in favor of the transaction. Collectively, this group holds close to 40% of Jupitermedia’s outstanding stock.

Getty Images will lease Jupiter’s Peoria facility in connection with the transaction. Jupitermedia also retains its online media business that includes five Web sites:,,, and It will use the proceeds of the transaction to pay off its bank debt of close to $80 million. Upon closing of the transaction, Jupitermedia expects to incur a non-cash loss of approximately $95 million.

The Seattle company will maintain Jupiterimages as a separate brand and Web site, updating it with Getty’s technology and content. Getty Images co-founder and chief executive officer Jonathan Klein said that combining Jupiter’s value-based product, particularly its wholly owned image inventory, with Getty’s media assets and global distribution channels will add value for customers of both companies and extend the international reach of the Jupiterimages brand.

The two companies first attempted this deal in early 2007. The New York Post had reported the transaction value at $450 million; Photo District News estimated it at $406 million. According to Meckler’s July 2007 comments, Getty had agreed to pay $388 million for the image-licensing business of its Darien, Conn.-based competitor. At the time, Meckler bristled about Getty reneging on a handshake deal and the $2-million loss posted by Jupiter as a result of the failed negotiation.

Since a high of $23.78 per share in December 31, 2004, Jupitermedia stock has been in decline. At press time on Thursday, it was trading at $0.65 on Nasdaq; its market capitalization hovered between $20 million and $25 million. Over a 52-week period, Jupitermedia stock has ranged between a $0.39 and $5.99.

Revenues have been similarly disappointing, declining since the first quarter of 2007. In the first quarter of 2008, Jupitermedia revenues came in $0.5 million to $1.5 million below analyst projections and $1.6 million below 2007 earnings for the same period. Still, revenues for the second quarter of 2008 were $35 million—several hundred thousand dollars above both the previous quarter and the second quarter of 2007—suggesting that the decline may have leveled off.

There are also two notable growth areas. Jupiterimages’ subscription offerings, led by Jupiterimages Unlimited, have grown by 15% in 1.5 years. Jupiterimages’ microstock Stockxpert has also grown steadily.

The acquisition will round out Getty Images’ business. It already dominates the highest-end traditional buyer segment; Jupiter’s middle-market subscription businesses will improve Getty’s penetration among smaller, budget-conscious creative shops and freelance designers. Owning two of the top microstock businesses also secures Getty Images’ leadership at the lowest end of the image market.

Copyright © 2008 Julia Dudnik Stern. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


  • Bill Bachmann Posted Oct 24, 2008
    Can someone PLEASE look into monopoly issues with the Fed government. They are buying up everyone... that is what Microsoft got fined for in monopoly court!

    Stop the Getty monster!

    Bill Bachmann
    Orlando, Florida

  • Mark Turner Posted Oct 28, 2008
    As a JupiterImages contributor (Botanica rights managed only) I'm curious as to what will happen to my relationship with an editor, to my sales figures, and to my royalty percentage (currently 50% of sales). Of course, I have no control over any of those. The picture that comes to mind is that of the small fish getting eaten by progressively bigger fish. Botanica >> Picture Arts >> Jupiter >> Getty.

    Mark Turner
    Bellingham, Washington

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