I found this neat online writing tool called Storybird. Storybird is a service that uses collaborative storytelling to connect kids and families. Two (or more) people create a Storybird in a round robin fashion by writing their own text and inserting pictures. They then have the option of sharing their Storybird privately or publicly on the network. The final product can be printed (soon), watched on screen, played with like a toy, or shared through a worldwide library. Watch a quick tour of how it works.
Since my students do not have email addresses to create accounts, I would create one teacher account and let my students create their Storybirds through it. I like the round robin idea where students can work together and take turns editing a story.