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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

August 1, 2011 at 12:11 PM

Redmond’s Smilebox sold, nearly all jobs intact

Andrew Wright was at a crossroads.

His Redmond photo sharing company, Smilebox, was growing steadily but needed to scale up for a push onto mobile platforms.

Smilebox offers photo-editing tools for creating digital postcards, slideshows, collages and other products on home computers and retail photo kiosks.

Wright had to raise more money — beyond the $16 million he’d raised since 2005 — or partner with a larger company that could take Smilebox to the next level.

He had received buyout offers for the past five years, but accepted one from IncrediMail, an Israeli company led by the former head of American Greetings.

IncrediMail today announced that it’s buying Smilebox for $25 million in cash, plus up to $15 million more if performance targets are met over the year and a half.

“They’re very clearly aligned with us in growing this thing and making it big,” Wright said. “It’s a very good fit.”

Wright, 48, is a RealNetworks veteran who received early backing from Real founder Rob Glaser and Paul Thelen, another Real vet who started Big Fish Games.

Smilebox has about 50 employees and all but one — an operations manager being replaced by an executive from IncrediMail — will keep their jobs after the deal closes this fall.

“We will continue to drive forward on our mission — the team stays here and stays intact,” Wright said.

Smilebox will benefit from IncrediMail’s global footprint and experience in direct marketing and analytics, he said.

“Smilebox is a great consumer brand that has established a loyal following through a strong focus on its consumers’ needs. This acquisition is a perfect fit for our growth strategy as it extends our product portfolio and substantially increases our premium subscription base,” IncrediMail Chief Executive Josef Mandelbaum said in a release.

IncrediMail’s main product is a premium email service sold in more than 100 countries. It also operates a photo-sharing product called PhotoJoy. It expects Smilebox to add more than $15 million in sales to its financial performance in 2012.

In the meantime, Wright expects Smilebox to introduce its first iPhone application in about a month.

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