American Greetings to Acquire PhotoWorks, Inc.

CLEVELAND and SEATTLE, Nov. 28 /PRNewswire/ -- American GreetingsCorporation (NYSE: AM) and PhotoWorks, Inc. (OTC Bulletin Board: PHTW) todayannounced they have entered into an agreement whereby American Greetings,through a wholly owned subsidiary, will acquire PhotoWorks for approximately$26.5 million. Under the terms of the agreement, American Greetings will makea cash tender offer to acquire all outstanding common shares of PhotoWorks ata price of 59.5 cents per share. The tender offer will be followed by amerger in which the holders of the outstanding common shares of PhotoWorks notpurchased in the tender offer will receive the same per share price paid inthe tender offer, in cash, without interest. American Greetings is expectedto launch the tender offer shortly, and the merger is expected to close inlate January 2008.

The Board of Directors of PhotoWorks has unanimously recommended thatshareholders of PhotoWorks accept the offer. Certain shareholders ofPhotoWorks have already signed agreements by which they agreed to tender allof their shares in the tender offer. The shares held by such shareholdersrepresent 44.5% of the total shares of PhotoWorks currently outstanding.

PhotoWorks is a leading online photo sharing and personal publishingcompany that allows consumers to use their digital images to create qualityphoto-personalized products like greeting cards, calendars, online photoalbums and photo books. PhotoWorks offers consumers new, creative, andrefreshing ways to connect and express themselves privately with friends andfamily, and publicly within communities of similar interest.

Zev Weiss, Chief Executive Officer of American Greetings said, "Theacquisition of PhotoWorks positions us for a comprehensive photo strategy,bringing together both digital and physical products. We are taking advantageof the opportunity to establish a leadership position in this growing channelof the social expression industry."Josef Mandelbaum, Chief Executive Officer of AG Interactive, one ofAmerican Greetings' segments, stated, "Our previous acquisition of Webshotsprovided a strong entree into the online photo sharing space, a significantnumber of unique visitors, and a scalable platform. Now, PhotoWorks providesa strong integrated supply chain platform to provide customers the ability tocreate unique, high quality physical products with their own photos. Thisfurther positions us to provide a full social expression photo solution to ourconsumers."Andy Wood, President and Chief Executive Officer of PhotoWorks said,"PhotoWorks is thrilled to be a part of this important step forward forAmerican Greetings. We are excited to build and provide a compelling onlineexperience for consumers in cooperation with one of the world's leadinggreeting card and social expression companies. I am confident that combiningthese companies' content and relationships will result in a more appealingsite with truly unique products for all of our consumers."

Weiss added, "At this time, the transaction is expected to have a minimalimpact to fiscal 2008 earnings."

About American Greetings Corporation

American Greetings Corporation (NYSE: AM) is one of the world's largestmanufacturers of social expression products. Along with greeting cards, itsproduct lines include gift wrap, party goods, stationery, calendars, ornamentsand electronic greetings. Located in Cleveland, Ohio, American Greetingsgenerates annual revenue of approximately $1.7 billion. For more informationon the Company, visit here.

About PhotoWorks

PhotoWorks(R), Inc. is an Internet-based personal publishing company andphotography community. The company's web-based services allow PC and Macusers to share and store their digital photos, host personalized My Share Webpages, sell one-of-a-kind products through My Storefront, join photocommunities, and create hardbound photo books, customized greeting cards,calendars, prints and other photography-sourced products. Formerly known asSeattle Film Works, PhotoWorks has a 30-year national heritage of helpingphotographers share and preserve their memories with innovative and inspiringproducts and services. More information on the Company is available athttp://www.photoworks.com.