I use Time Warner's (NYSE: TWX) America Online service (I'm not sure why, exactly, since lately it's been America Can'tGetOnline for me), so I've always been aware of the "You've Got Pictures" service. For the uninitiated, it basically allows a person to receive digital photos online and the option to purchase hard prints of them.
The concept never impressed me that much, to be honest. Quite frankly, it always seemed spooky. I mean, it's unnerving enough to have some stranger at the local CVS (NYSE: CVS) going through your vacation photos -- but to have those same photos transmitted over the sometimes not-so-secure cyberworld matrix can also be a chilling concept.
Eastman Kodak (NYSE: EK) will end its partnership with AOL on the offering at the end of the month, as the amount of revenue captured from the program apparently didn't make it worthwhile. Both companies will still pursue their own online digital initiatives, however; Kodak will continue its Ofoto.com business.
George Eastman put the first simple camera into the hands of consumers in 1888. Now his company is having trouble adjusting to the new world of digital cameras; hard copies just aren't necessary anymore. In fact, as Rick Aristotle Munarriz explained, there is so much more flexibility in managing digital photos as opposed to their material-based counterparts. So this move won't affect either company that much. If anything, it shines a light yet again on the risky nature of the film purveyor.
There will always be a place for non-digital photography; to be certain, no one wants to see fashion photographers use digital cameras exclusively -- the technology just isn't there yet. The big problem for Kodak, though, is that the consumer market is going digital... and it won't look back, as far as I am concerned.
Eastman Kodak enjoyed being a Dow component, but that is no longer the case. Back in February, however, Philip Durell wrote an interesting commentary about the pigs of the Dow (a variation on the dogs of the Dow strategy), and the mechanical selection process generated a list that included Kodak, as well as Johnson & Johnson (NYSE: JNJ) and AT&T (NYSE: T). No matter what list Kodak comes up on, no matter its dividend yield or relative strength at any given time, I wouldn't be a long-term investor in its shares. I don't feel that the company has a bright future; it just didn't react to the digital world as adroitly as it should have.
The story could change someday. But for now, I'll sit on the sidelines and see how things develop (sorry, couldn't resist a closing pun).
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Fool contributor Steven Mallas owns none of the companies mentioned.
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