Shutterfly Should NOT Go Public
Shutterfly has recently filed for an IPO. My honest feeling is that they should not go public. They will get creamed.
First, there is plenty of competition in the online digital photography business, with KodakEasyShare Gallery, HP’s Snapfish offering, as well as Yahoo and Google vying for market share. Each of them have additional channels to leverage, which Shutterfly doesn’t, and will hurt from not having access to.
Second, and more importantly, they have not yet shown the savvy in collaborating creatively with channel partners. Their leadership team is experienced in Internet Marketing, but not in deal-making, which is what is likely to save the day.
Against that back-drop, either they should get themselves sold to Microsoft or News Corp, or hire a leadership team that can go out and do deals with, for example, the New York Times, and Boston Globe. They should carve out a niche in the market, perhaps around the vector of Local Content, and build a channel around that.
Failing to put forward a compelling, unique and defensible strategy will make them an also ran, and market share will consistently erode in favor of the big multi-channel properties.
Getting themself sold to FedEXKinko’s might be a good idea.
Aren’t you forgetting the inevitable aspect of greed on the part of investors and management? Going public could be the best short term liquidity option in terms of share prices, assuming the company has already investigated the prices that Microsoft and others would be willing to pay… I would bet they have.
What about the lock-ups though? Especially for management, if they go out and then the stock falters before the lock-ups expire, they cannot really reap the benefits of the exit.
VCs - yes.
This company has tried to sell themselves for the last three years and nobody seems to want to pick them up. So then they go back to their original plan for an IPO. Whatever it takes to do the exit strategy, so the investors can get some money back.
I like your blog and skim through it in my usual list of blogging content to follow…..
But I thought this was one specific piece where you put a stake in the ground by putting this comment (which I did not agree with the 1st time I read it) and now I see is definitely not true as reality plays out….
My wife seems to love their products / services and I see a lot of friends still use them well. Also, loks like after a wild n rocky start to their IPO, they do seem to have turned around after some solid results in Q4.