Microsoft Money, chief competitor to Intuit’s Quicken, is dead. Many in the blogosphere are painting this as an “Intuit beat Microsoft” story. I’d suggest those people consult the stock market…
Intuit’s chief competitor dies and their stock does nothing? Really? Is that possible.
It is. But first let me say something quick about the blogosphere’s reaction.
To make this point I’d like to quote one of the one’s making the “intuit’s victory” argument. Top of the ol’ Techmeme list is Ina Fried so I’ll use her. She has an article entitled “How Intuit managed to hold off Microsoft” where she tries to make this argument…
Intuit is one of the few companies to take Microsoft head-on on its home turf--packaged software--and come out on top. Even more notably, Intuit has managed to do it several times, with Quicken of course, but also with QuickBooks and TurboTax.
Of course, it was more than just Intuit's success that led to Money's demise, which CNET News first reported on Wednesday. The product was ultimately doomed by several factors, including a shift away from packaged software, the rise of Internet-based rivals like Mint.com, and a brutal economy that has forced Microsoft to scale back ambitions in several areas.
Now, I’m not accusing Ms. Fried or anyone else of lying. But they are framing the story in a way that’s dishonest. That’s a trend that drives me crazy because the whole point of a news organization, of any kind, is to give you the real story. To put things in perspective for you so you don’t have to hunt down the facts yourself. In that vein, here’s the truth...
Intuit did not beat Microsoft they simply hung on to a worthless market until Microsoft gave up.
(btw – Notice how all the “other factors” mentioned in that quote are factors that work against Quicken too)
Intuit has a reason to stay in the personal finance market. They have two profitable products called TurboTax and Quickbooks. Quicken essentially acts as great marketing for those two.
Basically Quicken puts the Intuit brand in people’s heads and eventually sets up sales for the far more expensive products in the future. But personal finance is a losing business and that’s why the market essentially didn’t care when Quicken’s chief competitor died off. Because it probably won’t have that much of an impact on their bottom line.
So what the stock market teaches us about Intuit is that they make most of their money off higher end offerings and that Quicken doesn’t mean much in the long run (at least on it’s own). Microsoft gave up because it doesn’t have those established high end products which makes Microsoft Money as much a liability for them as it is an advantage for Quicken.