PhotoChannel Networks Inc.
TSX VENTURE : PNI
OTC Bulletin Board : PHCHF

PhotoChannel Networks Inc.

October 31, 2006 18:32 ET

PhotoChannel Networks Inc.: 1 for 10 Share Consolidation

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 31, 2006) - PhotoChannel Networks Inc. (TSX VENTURE:PNI)(OTCBB:PHCHF) ("PhotoChannel" or "Company"), the leading innovator in online digital media solutions for retailers wishes to advise that it will implement the consolidation of its commons shares on a ten (10) old common shares for one (1) new common share basis. The Company's new common shares will be posted for trading at the open on Thursday, November 2, 2006, on a consolidated basis under the trading information set out below.

Symbol: PN

Cusip No.: 719316200

If, as a result of the consolidation, a holder becomes entitled to a fraction of a consolidated common share, an adjustment will be made by rounding to the nearest whole common share.

The Company will be mailing letters of transmittal to holders of common shares on or about November 1, 2006, requesting them to forward their pre-consolidated share certificates to Computershare Investor Services Inc. in Toronto in exchange for new share certificates representing the appropriate number of post-consolidated shares.

"The Company has considered the consolidation of its common stock for some time" says Peter Fitzgerald, Chairman and CEO of PhotoChannel. "We believe that given the Company's strong balance sheet and its continued growth that it is in the Company's shareholders best interest to now implement this capital restructuring."

About PhotoChannel- Founded in 1995, PhotoChannel operates PNI Digital Media to provide services for major retailers, wireless carriers and content providers. The PNI Digital Media Platform connects consumer ordered digital content with retailers that have on demand manufacturing capabilities for the production of merchandise. Currently PNI Digital Media generates transactions for retailers and their thousands of locations across North America, including Wal-Mart Canada, CVS/pharmacy, Eckerd Drugs and Costco Canada. For more information please visit www.pnidigitalmedia.com.


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