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In this paper, a method for embedding a digital watermark onto a host imagepsilas alpha channel is described. Blending factors which form an alpha channel define the proportion of foreground and background colors which in turn are combined to result in an actual color for each pixel. Here, the blending factors corresponding to areas along edges in the host image is of interest. The host image is first divided into blocks of subimages. A dominant edge found in any subimage is used to divide the pixels on that block into three groups:the group of foreground-color only pixels, the group of background-color only pixels, and the group of foreground-background blended color pixels. The blending factors for the pixels in the last group are modified to embed each bit of a watermarking pattern. Because the modified pixels belong to the area around an image edge, change to the original image due to watermark embedding is less perceptible.