Once the ribbon is downloaded from the Fotolia website and installed, users can search stock photos for the projects that they’re working on straight from the top menu of their applications, so they don’t need to go away from their documents to obtain appropriate stock imagery.

Before purchasing an item from the company’s library, which it says presently counts over 7-million royalty-free high-resolution files, users can hover over search results within the doc to see a preview of images. Double-click, and the item gets placed in the doc for you to see if it matches what you were trying to visualize. Users can then opt to buy images in any of the available sizes and licenses straight from Fotolia. Once the image is downloaded into the user’s document, users are free to use the Fotolia file with no limit on time, copies or geographical placements.

Fotolia has been supplying imagery to Microsoft Office Online customers for a few years now, but this really ties the knot.

It’s a great idea, and I concur with Microsoft’s Office.com Group Manager Rob Ashby, who commented that the addition of Fotolia can be a significant productivity win for customers. I guess it also makes sense for the company to endorse this and similar add-ons because they’re bound to keep users inside its software applications as much as possible, but the benefits for users are clear too. It’s also yet another sign that the line between desktop and web software is blurring.

Again, this product is quite brilliant, and I’m sure other stock photography players will be following suit soon.

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The microstock photography business is growing out of nothing. The leader in the market, iStockphoto, is projecting $200 million in revenues this year. When iStockphoto was bought by Getty Images February, 2006 for $50 million, its revenues that for year were about $23 million, according to COO Kelly Thompson. In 2007, revenues were $72 million, and the company never disclosed 2008 revenues. (Update: Thompson says 2008 revenues were around $150 million). Thompson says iStockPhoto has been profitable since before the acquisition and now represents a “significant chunk” of . (Getty Images is owned by the private equity firm Hellman & Friedman and does not break out revenues formally via audited statements).

The demand for affordable images for use on Websites and in print is catching on and iStockphoto is the main beneficiary. It sells a photo, illustration, or video every second, and pays out $1.2 million a week to the photographers and artists who upload images to the site. There are nearly 80,000 artists in total represented on the site and 5 million images. “Definitely the print side is declining and we are seeing lots of Web usage,” reports Thompson.

But iStockphoto is not without competitors. Rival Fotolia is trying to catch up and recently received a massive cash infusion from TA Associates. It has about the same number of images and recently launched a completely free stock image service called PhotoXpress (which competes against Getty-owned Stock.xchng). Fotolia also has about 6 million images and roughly 90,000 contributors.

The battle, though, is now going to be around quality and price. iStockphoto is trying to go upmarket by exposing some of its top photographers to Getty clients. And today it just launched its Vetta Collection, which is comprised of about 35,000 higher-quality photos which are more produced than the typical stock image (the space farmer image above is one from Vetta). The Vetta images start at around $20 each, compared to regular images, which start at about $1.

Thompson says it is all part of iStock’s strategy to move customers up the chain to buy more expensive images:

Almost every industry has a free component, everyone gives away free samples. That is what we are doing. Even when it is free, it needs a license around it. Once people get used to using images like that, they move up to buying more expensive images. Even the traffic from iStock to Getty is more than we originally expected.

Image search is another area where the iStock needs to win. People need to find the images they want before they can buy them. iStock relies on photographers and artists to tag and title their own photos, but they don’t always do such a great job. After all, they tend to be more visually-oriented. So instead, iStock has been collecting data on which images people hover over and click on after they do a keyword search, and those now are ranked higher in results starting today. By August, the results will be fine-tuned by language and country of origin as well. But if you want to search only for Vetta images, you have to do that in advanced search right now (by tomorrow, you should be able to do it directly on the Vetta portion of the site).

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Microstock photography site Fotolia has taken its first outside round of investment since it was founded in 2005 and it is a doozy. The company isn’t talking about it, but an exceptionally good source with knowledge of the deal confirms that private equity firm TA Associates has invested between $50 million and $100 million in Fotolia. In comparison, rival iStockPhoto was acquired for $50 million by Getty Images three years ago. There are some rumors going around in venture circles that Fotolia got sold outright for $150 million. Our source, however, emphasizes that the company was not sold. Instead, after competitive bidding from more traditional venture firms, TA Associates came in with a massive injection of capital.

Up until now, Fotolia has been self-funded by French entrepreneurs Oleg Tscheltzoff, Thibaud Elziere, and some silent partners. The company is officially headquartered in New York City, but everyone still works from home. The company has been on a roll lately. It reached one million registered users and five million images for sale in February, introduced microstock video in April, hired an iStockPhoto co-founder in May, and just yesterday launched a royalty-free photo site called PhotoXpress.

Fotolia is smaller than iStockPhoto, but it has been going through a recent spurt of growth, while iStockPhoto seems to be stagnating. For example, unique visitors to Fotolia have tripled in the last twelve months to 3.4 million worldwide, according to comScore. Meanwhile, iStockphoto’s uniques are down 14 percent to 5.9 million (see chart below).

Fotolia is being pretty aggressive in undercutting iStockPhoto’s already low microstock prices, and the new PhotoXpress site is even more disruptive. Forget about selling images and illustrations for $1 to $10 a pop. It offers 10 free images a day. It is hard to see how this translates into huge revenues for Fotolia, but obviously it has big ambitions. Now it has the cash to really shake up the market.

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Fotolia, a marketplace for microstock photography and video, is launching PhotoXpress, a free, premier-quality image bank, which will offer users royalty free image licenses for personal or professional use, ranging from Web site design to advertisements and editorial imagery.

Patrick Lor, president of PhotoXpress North America, says the site will feature a collection of more than 350,000 images and illustrations, but Lor’s ambitions are to have close to a million photos available free of charge. Lor, who also holds the title of president of Fotolia North America, recently joined the company. Lor previously helped to build rival and now Getty-owned iStockPhoto, which he helped co-found (Lor left in 2006, shortly after Getty acquired the startup for $50 million).

Lor says PhotoXpress will remain independent from sister site Fotolia, however the two are intricately connected. PhotoXpress members will be able to license up to 10 images daily, free of cost. The images are sourced from stock illustrators and photographers from around the world and span more than 22 categories, including global landscape scenery, photos of people in professional settings, architecture, and generic backgrounds. Only proper attribution is required. Professional ad agencies and firms who might need more than 10 images a day will be sent to Fotolia. In this sense, PhotoXpress is a lead generator for Fotolia. But more than that, it is a way for professional photographers to expose some of their work for free to a larger Web audience, while inculcating a respect for copyrights among Web consumers. It is an attempt to bridge the two worlds, and Fotolia wanted to do this before its competitors did.

Lom says the biggest challenge is convincing the photography world to give away stock photography for free. PhotoXpress is still working out if the site will make any revenue—the obvious revenue stream is third-party advertising on the site, but Lor couldn’t confirm or deny that there will be ads on the site. PhotoXpress’s main competitor is Hungarian site Stock.xchange, which happens to be partly owned by Getty Images. Currently, Stock.xchange has close to 400,000 images to choose from.

At TechCrunch, we often uses Flickr images licensed under Creative Commons for the best choice of images and the ability to publish the images freely. Bloggers will definitely find it helpful to tap into the wide selection of PhotoXpress’s site to find royalty free, high quality images to illustrate posts. This is exactly the right model. Image use is free up to a certain level (i.e., for most consumers, who serve to spread the images around and market them in effect). If you need more, then you start to pay a reasonable, modest amount.

(Photo courtesy PhotoXpress).

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Patrick Lor, co-founder of iStockphoto, a Getty owned-online marketplace for microstock photography and video, has joined rival Fotolia as the President of Fotolia North America. iStockphoto and and Fotolia, which were both launched around the same time and serve the same purpose, have a long standing competition in the microstock photography space for the best images, the most talented contributors and customers. Lor retired shortly after Getty Images, one of the leaders in stock photography, purchased iStockphoto in 2006 for $50 million.

According to Lor, his non-compete contract expired with Getty recently, which left him available to get back into the stock photography business. iStockphoto was initially launched to democratize photography and let all people use images, Lor says. He was disappointed to hear of iStockphoto’s aggressive price increases following the Getty acquisition and maintains that Fotolia’s prices are much more fair for consumers. Lor says that Fotolia has a lot of potential for growth, which may be true. According to ComScore, Fotolia reached 3.7 million unique visitors worldwide in March, up from 2.3 million in January. iStockphoto had around 5 million unique visitors in March, dropping slightly from 5.2 unique visitors in January. Lor hopes to launch some new services in the future but won’t reveal what those are just yet.

In February, Fotolia reached its one millionth registered member and has 5 million stock images for sale, for as little as 14 cents, and typically a dollar or two. Images at iStockPhoto start at $1.50 per image and go up from there. Fotolia says it is registering new members at a rate of 3,000 per day (86,800 per month). Fotolia also started recently selling stock video (something iStockphoto has been doing for a while).

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Microstock photo site Fotolia has just launched its video offering. Back in February, when the service reached one million registered users, the company indicated that the launch of its video service would come soon, and now it is here.

Fotolia is launching with 10,000 royalty free video clips that can be used in video ads, on Websites, mobile animations, and more. These are generic 5 to 60 second clips which can be used as filler, background or for transitional moments. The costs vary but they start at around $10. Competitor iStockPhoto has offered stock video for years and recently expanded to audio.

Fotolia’s selection still seems pretty spare when you search on a specific keyword like “flu” or “despair.” Fotolia turns up one video result for each of those terms, whereas iStockPhoto turns up 117 and 718 video results, respectively. But Fotolia’s collection should fill out over time. A generic video clip really shouldn’t cost more than $10. What would be nice, however, would be a system where you could request the kind of video imagery you want, and then have it produced by a videographer, who would then maintain the rights to resell it on Fotolia.

Here is a Fotolia video described as “ball with pain”:

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Micro-stock photography is alive and well. Fotolia tells us they have just reached their one millionth registered member and now have 5 million stock images for sale, for as little as 14 cents, and typically a dollar or two. Of those one million registered members, 860,00 are active (defined as having made at least one credit card purchase or uploaded content within the past three months). Fotolia says it is registering new members at a rate of 3,000 per day (86,800 per month)

ComScore also shows some health growth, with 2.3 million unique visitors a month (the vast majority of which are obviously not registered members). Competitor iStockphoto , which was purchased by Getty Images for $50 million in 2006, has about twice as many monthly visitors (5.2 million). But on ts Website, iStockphoto says it only has 4 million images.

Another interesting stat the company shared with me: the number of uploads is very close to the number of paid downloads. People upload 40,000 images and other content every day, and download 50,000 images a day. That download rate translates to 1.5 million paid downloads a month. Fotolia takes 20 to 50 percent of the sales price.

Next up, Fotolia will begin selling stock video (something iStockphoto has been doing for a while). Fotolia already has 20,000 videos uploaded, and plans to roll out the new category generally in March or April.

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Fotolia, a micro-stock photography site that we first covered back in November 2005, is further undercutting some of the larger, more traditional stock photography sites, such as Getty and Corbis, by providing many of the same higher-quality images but at lower prices.

Up till now, micro-stock collections have consisted largely of lower-quality photography shot by amateurs or hobbyists and sold through sites like Fotolia, iStockphoto, and SnapVillage for as little as $0 and often no more than $50. In contrast, stock images sold on Getty and Corbis command a much higher price for their superior quality and come from professional photographers who have hired agents to distribute their work.

With the maturation of the Internet came the rise of micro-stock photography because a wider range of photographers could bypass agents and sell more directly to an online market. Some of the more traditional stock photography outlets have embraced micro-stock photography, despite the cannibalization implications; Getty purchased iStockphoto for $50M in February 2006 and Corbis launched SnapVillage in June 2007. Now Fotolia, which claims to be the largest micro-stock image library with 2.8M images, is doing the opposite: embracing traditional stock photography while maintaining micro-stock photography’s biggest selling point, lower costs.

Providing further evidence that photos on the web demand a different price structure than photos offline, Fotolia has debuted what it’s calling the “Infinite Collection.”. This is a set of 15,000 agency-distributed photographs that would normally be found on expensive stock photography sites but are now being sold for as little as $20 on Fotolia. Since these are exactly the same products sold elsewhere, Fotolia is evidently embarking on a strategy of price discrimination, hoping to sell premium products to an audience that wouldn’t fork over the money necessary to buy them on Getty or Corbis.

This idea is corroborated by Fotolia’s refusal to name the collections from which they are drawing their traditional stock photography, which suggests that it doesn’t want to make it easy for people to hunt down the best prices for the same photography. Since professional photographers also tend to shun micro-stock sites because they can’t make as much money from them, the lack of transparency also makes me wonder about how aware the professional photographers actually are that their photos are being sold at highly-discounted prices.

In any case, it will be interesting to see how well this form of price discrimination holds up in the long run, since the Internet has a tendency to prevent rather than foster price discrimination. I suspect that this new offering will lead higher-end stock photography sites to lower their prices, assuming that photographers are indeed really willing to sell their work for a lot less.

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The new version of Fotolia sees complete redesign that is said to boost stability, speed and enhance the user experience, as well as providing improved support for global standards and non-English languages.

Fotolia’s new public API makes it possible for developers to integrate Fotolia in to their applications or products. The company already has numerous partners for the program building applications including plug-ins, add-ons and widgets.

SVG vector support gives Fotolia an edge over many of its competitors by supporting a format that continues to grow in popularity due to its ability to be resized on any scale without quality loss.

Fotolia was already a well rounded stock photography site. The new version makes the overall package more appealing.

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Fotolia launched yesterday.

Fotolia is a site where photographers can sell their images directly to consumers. They offer only royalty free images (Getty Images, for instance, offers a mix of royalty free and rights managed images). Photographers keep up to 80% of fees.

Three types of rights may be purchased – web only, print only, and exclusive buyout. The exclusive buyout option results in the image being removed from the site,and no futher sales of the image are made after that.

Fotolia has created an innovative pricing system to encourage use by photographers and manage the user experience. Photographers may price photos within certain ranges determined by their rank. The more sales a photographer has, the higher their rank. Prices start at zero and can be as high as $2,000 for an exclusive buyout.

The site is very well designed, and they’ve integrated Ajax previews of images along with photographer tagging of images for easier searching. They have multi-language support (including blogs in four languages) and RSS for all results pages.

After a 6 month limited beta, Fotolia now has 100,000 images online.