In this paper, we propose a watermarking algorithm for colour image, concept of visual cryptography extended to digital watermarking based on VSS algorithm. An image which has to be transmitted (watermark) is split into two sheet-images using visual secret sharing algorithm. Then, one sheet-image are embedded into the host image blue component before transmission and second sheet-image is held by the owner At the receiving end, user extracts the sheet-images from the watermarked image and stacks the two sheet-images directly without any leakage of information about the original image. The algorithm can satisfy the transparency and robustness of the watermarking system very well. Sheet-image are embedded into the host image green, blue and red component one by one and compared. The results showed that mostly blue component gives better result.