Have you ever had an image with text that you wanted to put on the web, but it looked weird on your blue background? Maybe it looked something like this:

Well, we can make it look like this:

Notice how some transparency is preserved and how it blends in with the background.
You will need to download ONE plugin, Alpha Mask:
Well, first you open your image:

Step one, Select All (Ctrl-A) and Copy (Ctrl-C).
Step two, Effects > Alpha Mask with the following settings*:
Mask File - Choose which file to use as a mask. Here, we won't be choosing an image, but rather using the image on our clipboard.
Invert Mask ✓ - This inverts the color of your mask. Remember white is kept and black is discarded.
Mix Alpha ✓ - This ensures that transparency is kept (that is why the shadow blends in with the background)
Paste From Clipboard ✓ - Rather than using a pre-saved image, the plugin will use whatever you have on your clipboard, which is, in this case, the image.

OPTIONAL: Duplicate the layer and merge down for a darker shadow. See this post for some more tips. (Thanks Sarkut!)
I encourage you to read all of the comments for alternative ways to do this.
Also, set the logo to Multiply blend mode for a darker shadow.
The result:

#tut725
*Thank you for cutting down my tut to two steps, pipp92.
**Not too simple, is it? (Mods)
Edited by csm725, 26 June 2010 - 06:45 PM.

















