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Adding watermark to image in PHP
<img src="watermark1.php?image=photo.jpg>

<?php
// this tells the browser to render jpg image
header('content-type: image/jpeg');

// getting the image name from GET variable
$image = $_GET['image'];

// creating png image of watermark
$watermark = imagecreatefrompng('watermark.png');

// getting dimensions of watermark image
$watermark_width = imagesx($watermark);
$watermark_height = imagesy($watermark);

// creating jpg from original image
$image_path =  $image;
$image = imagecreatefromjpeg($image_path);
//something went wrong
if ($image === false) {
    return false;
}
// getting the dimensions of original image
$size = getimagesize($image_path);
// placing the watermark 5px from bottom and right
$dest_x = $size[0] - $watermark_width - 5;
$dest_y = $size[1] - $watermark_height - 5;
// blending the images together
imagealphablending($image, true);
imagealphablending($watermark, true);
// creating the new image
imagecopy($image, $watermark, $dest_x, $dest_y, 0, 0, $watermark_width, $watermark_height);
imagejpeg($image);
// destroying and freeing memory
imagedestroy($image);
imagedestroy($watermark);
?>