Quicken Founder Takes Fight with Microsoft Online

Dennis Faas's picture

Intuit, the maker of well-known products such as Quicken, Quickbooks, and TurboTax, has purchased Homestead Technologies, a provider of small business websites. (Source: www.techcrunch.com)

At face value there's nothing odd about this; Intuit has acquired more than 19 companies in the last decade. And yet, all of these previous acquisitions were directly related, in some way, to small business financial needs thereby complementing Intuit's focus on finance functions. Acquiring Homestead is out of character. Does it mean that Intuit has finally run out of room in the financial market?

Maybe so. The company has had an enviable 24 year history in the financial space. Starting in 1983 out of a basement in Palo Alto, Intuit's first product was Quicken, a personal finance manager that offered the user a quick and intuitive interface and was one of the first accounting products to offer an easy way to line up pre-printed checks on a continuous feed printer. Quicken was perfect for personal finance and perfect for small cash-based businesses. It was during Intuit's first year that New England Business Services (NEBS) -- the largest supplier of office products to very small business -- gave Intuit an important boost in the small business world. It licensed Quicken for resale under its own label for NEBS customers and simultaneously became one of Intuit's first external investors. Intuit's subsequent growth over the next decade was phenomenal. Quicken became, by far, the leading personal finance product anywhere in North America.

That got Microsoft's attention. In the last half of the 1990's, the Redmond-based giant introduced Microsoft Money, which went to great lengths matching Quicken feature for feature. The race was on. Over the next few years, both Microsoft and Intuit added features, products and services aimed at small businesses. But by 2004, the race was essentially over; Intuit had a commanding market share in personal finance (Quicken), small business finance (QuickBooks) and tax preparation (TurboTax). (Source: www.techweb.com)

Now in 2007, Intuit may not have anyplace to go. Intuit is reputed to hold an unheard-of 79% of the tax preparation market, and Quickbooks holds a whopping 89% of the small business accounting software marketplace. If you're a shareholder of Intuit, you would have to wonder where the company will find its growth in a market that they've already saturated.  (Source: www.wikinvest.com)

Websites could be the answer. It's something every small business wants and there's no dominant players. Look for more non-financial acquisitions or developments from Intuit.

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