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Art and dot-commerce: Getty takes on Corbis

Getty buys, putting the firm in competition with Bill Gates in the market for online images.

The $200 million price tag may look stiff for a URL and an online poster and framing shop, but in buying, Getty Images is accelerating its entry into what it estimates as the $9 billion consumer art market.

The acquisition of by Getty, co-founded by the grandson of oil billionaire J. Paul Getty, sets up a battle royale with Corbis, another online image house owned by Bill Gates.

"Corbis is the only competition online," said Genni Combes, who has a "buy" recommendation on Getty for brokerage Hambrecht & Quist. "Corbis clearly doesn't have the business-to-business distribution of Getty, but Corbis has launched a consumer e-commerce site. It all comes down to who has momentum, who's signing distribution deals, and that remains to be seen."

Getty chief executive Jonathan Klein said will go beyond selling art work, adding community elements, services, art books, art supplies and materials.

"It's a $9 billion [consumer] market we're after overall, and that compares with the business-to-business market of about $4 billion," Klein said.

But with, Getty is heading into a consumer market that Corbis has been mining for two years. Corbis offers printed and framed posters as well as electronic greeting cards and digital images that can be used by consumers for Web sites, screensavers, school reports, or other personal uses.

Corbis has a higher-end market than, illustrated by Corbis' average selling price of over $100 on the consumer side while's side comes in at somewhat less.

In addition, notes David Rheins, vice president of the Corbis Productions group, Corbis has folded its many acquired photo collections into a single brand. Getty, by contrast, pursues a multi-brand strategy, leaving its acquired units to operate separately under their own brands--PhotoDisc, Tony Stone, and All-sports.

"We have been looking at the consumer market for six months, and is just ideal," said Jonathan Klein, Getty's chief executive. "We felt our business-to-business strategy was working, so we felt we could afford to focus on the new market."

In the long run, Klein said, Getty decided it was cheaper to buy than to build from scratch its own consumer outlet that then would compete with both Corbis and

James McQuivey, analyst at Forrester Research, says Getty and are not currently in the same market, Getty concentrating on more highbrow content and on movie posters.

"Getty paid for an awesome URL, distribution, and a platform to do business from," said McQuivey. Getty says has e-commerce deals with both Yahoo and America Online.

Combes too thinks the price is right. Getty predicts the site will do $35 million to $40 million in 2000, putting the price for at roughly five times revenues. The H&Q analyst said comparable Web content and e-commerce sites are selling for as much as 10 to 25 times estimated revenues for next year.

Getty, whose stock last week got a boost when it signed a deal with to provide images for its online card business, has acquired millions of images buying up brick-and-mortar stock houses. Like Corbis, it is spending aggressively to digitize those images and put them into searchable databases.

"The key is the digitization of content and the keyword searching," Coombes said. "There's no point in having millions of photos and not being able to find what you're looking for simply and easily."

The deal could give Getty's stock a boost too, given the so-called "" effect. Getty executives have in the past grumbled that their business, which is rapidly moving to the Internet, hasn't picked up the hefty valuations Internet companies command on Wall Street. With, that could change.