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Adobe is launching an update to its free Photoshop Express image editing tool today, including support for Yahoo’s Flickr online photo service.

The public beta of the tool now includes changes based on feedback from the community. The company says that it will keep enhancing the web-based tool and that’s a good sign.

[Update: Adobe issued this statement Wednesday evening:
“As you know, we were preparing updates to the Photoshop Express beta on May 7th that added significant new functionality to the product.
However, prior to going live, we discovered a bug that requires a fix.
We’re committed to delivering a quality experience with Photoshop Express and don’t want to send out an update that isn’t ready for prime time. We’re working on a quick resolution. Stay tuned – we’ll have an exact time frame on when you can expect these new Photoshop Express features soon.”]

Adobe, like other traditional software companies, run the risk of being undermined by web-based software if they don’t move into this market fast. Adobe launched its Photoshop Express beta in March.

With it, consumers can upload up to two gigabytes worth of photos to their own online storage account. They can edit the photos using quick-and-easy tools. There are, for instance, buttons for removing moles or red eye from a photo. You can share the photos with friends or make them publicly available too. You can tag and organize photos into libraries, increase or decrease the size of photos, email them through Adobe’s web-based email, and embed photos in a page. In contrast to past online photo business models, you can also download them to your computer in edited form without paying a fee.

Once you pull a photo down to your desktop, you can edit it with the local client software for smoother performance. The whole point is to deliver desktop-like drag-and-drop ease-of-use and fast performance to people who aren’t totally serious about photo editing, said Geoff Baum, director of Express product for Adobe in San Jose.

Now it is adding features such as “save as” so that it is easier to save an edited file and give it a new name. you can look at a historical time line that shows all of the different versions of an edited photo. You can undo effects or keep layering on new ones, such as changing the color of someone’s sweater.

Over time, Baum said there will be more premium services for hobbyists or professionals. That probably means there will be options to pay for more storage.

The new Flickr feature will allow the same kind of editing with Flickr accounts as is already possible with Photobucket, Picassa, MySpace and Facebook. With those social networks, you can grab photos that you have uploaded to the social networks and edit them with Photoshop Express. You can also upload your slide shows from Photoshop Express to those sites, using an Adobe embeddable player.

Since the release a month ago, there have been hundreds of thousands of users registering to use the software and they have uploaded over 65,000 public web albums. Photoshop Express works with any web browser. It is currently available only in the U.S., though overseas users can try it with likely limited performance.

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