updated 05:20 pm EST, Thu March 1, 2012
Kodak offloads online photos to Shutterfly
Kodak took a key step to getting out of its ongoing bankruptcy by tentatively selling its online Kodak Gallery photo service to Shutterfly. The deal will move both the 75 million users and their photos to the larger, more stable service. Photographers will have the chance to opt out and still get their photos, either through direct downloads for free or by buying photo DVDs while Kodak Gallery is active.
The price behind the deal wasn't disclosed. Kodak would say, however, that it involved a "stalking horse" bid, where a company agrees to make a minimum bid to keep the price at a guaranteed level if someone else makes an offer. The deal left open the possibility for someone else to secure the deal if they were willing to pay a premium.
Kodak hoped to complete the Shutterfly deal and others in the bankruptcy action during the spring, with the bankruptcy court signing off on the deal by the end of March.
The company declared bankruptcy in January after years of failing to adapt to the digital camera space. It has been trying a two-pronged approach to avoid liquidation, including selling off most of its non-printer businesses as well as suing companies like Apple, HTC, and Samsung to artificially boost its income through patent royalties and settlements.