Looking to expand its share of the growing digital photo services market, Hewlett-Packard (HP) has agreed to buy European online photo prints retailer Pixaco, the companies said Tuesday. Financial terms of the deal were not disclosed.

HP dove into the photo sharing and services market earlier this year by purchasing Snapfish, a prominent U.S. photo portal. Snapfish now has 20 million registered users, according to HP.

Pixaco was launched in 2003 by bilderservice.de, a German, startup that has around two dozen employees. The Pixaco Web site, at http://www.pixaco.com/, sells digital photo prints and products like t-shirts and mugs, but does not offer photo album sharing and storage, as Snapfish does. Over time, HP intends to add Snapfish's features to Pixaco, HP said. For now, Pixaco will retain its name and brand, according to a company representative.

HP's printing and imaging division is often referred to as the company's crown jewel. A strong portfolio of digital photography services complements HP's other assets, including its digital camera, PC and photo printer product lines.

Photo services developers have proved attractive acquisition bait. Google acquired photo organization technology developer Picasa last year, while Yahoo snapped up the popular Flickr sharing service in March.

Research firm IDC estimates that 90 billion images were printed globally in 2004, with digital photos accounting for 43 percent of that total, according to a report issued this month. IDC expects print volume to continue growing at around 14 percent a year for the next five years, with digital images passing print in 2005 as the dominant medium.