I recall the time when the online payment company PayPal went public, only to do a secondary within months and then cap it all off by selling itself to eBay (EBAY). The ones who truly made money were the investment bankers shuffling around that asset and taking a piece of the pie each time. (My view of bankers is another story.)
I'm not sure which road Shutterfly will take. Nor am I certain that Shutterfly's market valuation is worth buying at these levels.
But Shutterfly will take one road or the other because it's too small to compete with photo services with deeper pockets, such as Eastman Kodak (EK) and Hewlett-Packard (HPQ), and it's too big to remain complacent and small.
For a look at which startups in the photo and video sector might make interesting buys, read my Net Sense column.
SFLY 1-wk chart: