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HP to Acquire European Online Photo Service PIXACO

PALO ALTO, Calif., Dec 13, 2005 - HP today announced it has signed a definitive agreement to acquire bilderservice.de GmbH, which operates PIXACO - a leading online photo services and products site in Europe.

The acquisition of the privately-held company will enable HP to rapidly extend the reach of its online photo services throughout Europe, building on the purchase of Snapfish earlier this year. HP plans to extend many of its Snapfish capabilities to the PIXACO service - bringing European customers greater choices for printing, sharing and storing their photos.

“This acquisition gives HP the ability to quickly become Europe's largest online photo service, just as it is in the U.S. today,” said Ben Nelson, vice president and general manager, Snapfish, Digital Photography and Entertainment, HP. “Together, Snapfish and PIXACO have the experience and scope to provide a world-class online photo experience that will uniquely meet the needs of consumers in Europe.”

Today, Snapfish has 20 million registered users in the United States and United Kingdom and is adding up to 1 million new users every month.

The acquisition also is expected to foster the growth of Internet-to-retail digital photography services in Europe. Currently, Snapfish powers online photo services for more than two dozen leading retailers, Internet service providers and consumer brands in both the United States and United Kingdom, and will now look to align with similar partners throughout Europe.

Since PIXACO was established in 2003 by bilderservice.de, customers in 11 countries across Europe have come to recognize and trust the products and services made available through the PIXACO site.

“With this move, Europeans will now be exposed to a whole new level of digital photography services in addition to the best-value offering that they have come to expect from PIXACO,” said Karsten Schneider, chief executive officer and founder, bilderservice.de GmbH. “We look forward to providing our customers with a more powerful and sophisticated online digital photography experience.”

PIXACO customers will continue to enjoy the same benefits they receive today, along with new features and services from HP's Snapfish portfolio of digital photography solutions.

More information about all of Snapfish's products and services is available at www.snapfish.com.

About PIXACO
Located in Jena, Germany, bilderservice.de GmbH established the PIXACO portal in 2003. Today, PIXACO is one of the leading e-commerce sites providing photo services and photo products in Europe. The award-winning PIXACO portal offers quick, simple and inexpensive solutions for printing digital photos and buying a wide range of photo products online. Additional information is available at www.pixaco.de.

About HP
HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended Oct. 31, 2005, HP revenue totaled $86.70 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at www.hp.com.

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This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP and its consolidated subsidiaries may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including expected benefits of the transaction; management plans relating to the transaction; the expected timing of the completion of the transaction; statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits may not materialize as expected; risks related to the timing or ultimate completion of the transaction; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2005, and other reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2004. HP assumes no obligation and does not intend to update these forward-looking statements.