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SAN FRANCISCO (Reuters)—Hewlett-Packard Co. said on Monday it agreed to buy closely held online photo service company Snapfish as the computer and printer maker aims to capitalize on the fast-growing online photo printing market.

Financial terms of the proposed acquisition of Snapfish, which claims more than 13 million registered users, weren't disclosed.

Snapfish provides free online photo sharing, photo storage and management, free editing stores and software, as well as online print ordering, among other services.

Snapfish competes with other companies such as dotPhoto Inc. and Eastman Kodak Co.'s Ofoto Inc.

HP said that Snapfish's members are growing at a rate of more than 500,000 members per month and said that 90 percent of Snapfish's customers recommended the service to others.

The imaging and printing business is considered the crown jewel of HP, which is the world's largest computer printer company, but faces stiff competition from Lexmark International Inc.

HP's printing business, which also consists of selling replacement ink cartridges that are highly profitable, still accounts for the lion's share of HP's operating profits.

Shares of Palo Alto, California-based HP rose 5 cents to close at $20.15 on the New York Stock Exchange. It said that it expects the acquisition of San Francisco-based Snapfish to close in April.

Copyright ?? 2005 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in eWEEK.