As part of its continuing bankruptcy restructuring, Kodak has entered into an agreement to sell its online photo services business to Shutterfly for $23.8 million. The move will mean that the accounts and uploaded images of current Kodak Gallery customers in North America will be transferred to Shutterfly, though customers will be able to opt out. Shutterfly is a "leading social expression and publishing service" that will benefit from Kodak Gallery's userbase of over 75 million, though the deal isn't set in stone — it's a stalking horse agreement, meaning that other buyers may seek to make superior bids upon auction at a later date.
When filing for bankruptcy, Kodak expressed a desire to "focus on its most valuable business lines," and the sale of Kodak Gallery follows the offloading of its image sensor division and the cessation of digital camera production. It sounds like the retail and home printing business is about the only thing left making a profit for Kodak — we'll have to see if that model will be enough to sustain the company in the long-term.