Done Deal: Google partners with Intuit QuickBooks for $120 billion SME ad spend

I asked, on August 28, “Next Google Apps targets: Intuit QuickBooks, MS Money?” Today, Google and Intuit QuickBooks announced just such a strategic product integration and business development deal.

During a conference call, Google CEO Eric Schmidt and Intuit CEO Steve Bennett confirmed that the search advertising powerhouse and the market leading small business accounting software company are collaborating to create and market a new, jointly developed QuickBooks application incorporating Google advertising, listings and desktop products and services: QuickBooks 2007.

Slated for release this Fall, QuickBooks 2007 will feature four integrated Google services: Google AdWords, Google Maps, Google Base and Google Desktop.

Both Google and Intuit are touting their strategic alliance as a win-win-win: win for Google, win for Intuit and win for small businesses.

How does Google win? Schmidt is eager to turn millions of SMEs (small and medium enterprises) on to the Google AdWords machine but has been unable to crack the hard to reach local and small business markets; QuickBooks 2007 will provide a direct sales route to SMEs.

How does Intuit win? Intuit is eager to sell more QuickBooks; QuickBooks 2007 “enhanced by Google” will provide a sales proposition for customer upgrades and new customer acquisitions.

Do SMES win?

In “Google wants $10 billion local online ad spend” I present Google’s strategic targeting of the SME market:

Google is taking its mission to monetize “all the world’s information” to your neighborhood. Google laid down a local gauntlet today targeting the $10 billion in advertising local businesses are projected to spend online by 2010.

I cite Google VP Global Online Sales & Operations, Sheryl Sandberg, in New York City last week, expressing Google’s enthusiasm for the “huge” and “highly monetizable” local opportunity:

At the tail end, we think the local opportunity is huge. Local has a very interesting property in that it is very highly monetizable.

I noted “Google is hungry for the advertising spend of New York City delis, San Francisco cafes, Chicago boutiques, Atlanta dry cleaners, Miami spas, Los Angeles hair salons…”

Schmidt today let it be known that he also wants to feast on the advertising budgets of local accountants, attorneys, construction firms…that typically use Intuit’s QuickBooks to help them run their “back offices.”

Total directional media ad spend is projected to reach $120 billion by 2010, according to Kelsey Group forecasts. The Kelsey Group defines directional media as advertising that is delivered to potential buyers when they are in the process of making a purchase or buying decision. The Kelsey Group projects that local search, Internet Yellow Pages and online classifieds will help directional media gain share relative to total advertising.

Schmidt believes the Intuit software way is the way to the advertising budgets of elusive SMEs:

By adding key Google services into the world's most popular accounting product, we're making it easier than ever for small businesses to find and use all of the tools available to them.

The tools Schmidt wants SMEs to find, of course, are Google tools. QuickBooks 2007 users not only will “find” Google products, they will be hard pressed to avoid them.

What will QuickBooks 2007 look and act like?

According to Google and Intuit:

QuickBooks 2007 will include several services that provide an easy way for small businesses to use Google to get their businesses and products noticed on the Internet – right from an icon on the QuickBooks Home page.

AdWords and Small Business Profile Pages

A Google AdWords module will be integrated into QuickBooks 2007 enabling users to create AdWords accounts and run AdWords campaigns through the QuickBooks interface. Moreover, Google AdWords will automatically “fetch” data on the QuickBooks users from within the QuickBooks application to pre-populate Google’s AdWords admin system.

The AdWords module also includes a turnkey “Small Business Profile Page” feature whereby QuickBooks users without their own Websites can create a simple business profile, hosted by Google, to serve as the landing page for an AdWords campaign.

Google Maps

A Google Maps module will be integrated into QuickBooks 2007 enabling users to create “free” Google local business listings and coupons through the QuickBooks interface.

Google Base; QuickBooks Product Listing Service

A Google Base module will be integrated into QuickBooks 2007 in tandem with Intuit’s “QuickBooks Product Listing Service.” Using technology acquired from StepUp Commerce, an “Internet inventory service,” the QuickBooks Product Listing Service will enable direct uploading of users’ QuickBooks inventory data into Google Base through the QuickBooks interface.

Google Desktop

QuickBooks 2007 will incorporate the Google Desktop product.

What is the upside for Intuit? According to Bennett:

By partnering with a leading company like Google, we bring together Intuit's strength in creating easy-to-use solutions with Google's Web expertise to offer leading-edge online services to help small businesses attract new customers.

What is the upside for Google? According to Schmidt:

This alliance combines the strengths of both Google and Intuit to deliver innovative online technologies that help small businesses succeed in an increasingly competitive business environment.

Both CEOs are betting that QuickBooks customers will view the Google-QuickBooks integration the way they do: a combination of “the Power of QuickBooks with Google's Reach to Help Small Businesses Attract New Customers.”

Schmidt and Bennett are so confident in such power and reach that virtually no money is changing hands between Google and Intuit, for now. Google is counting on successfully acquiring QuickBooks users as AdWords customers; Intuit is counting on selling more QuickBooks units. Both sides have agreed, however, to revisit a revenue sharing arrangement in the future, according to value developed by each side.

What is the upside/downside for QuickBooks users?

The upside, according to Google and Intuit is:

For the first time, small businesses can use QuickBooks to market themselves online by listing their businesses on Google Maps, creating and managing advertising campaigns with Google AdWords and posting their products for sale on Google through Google Base – a free product listing service. Integrated into QuickBooks 2007, available this fall, QuickBooks customers will have the ability to attract new customers using Google, the world's leading search engine.

But is it all Google and Intuit goodness? The downsides for SME users of QuickBooks are:

1) Google “free” business listings services and Google Base listings are merely vehicles for Google to obtain SME content, cost free, with the goal of selling the content owners AdWords.

In “Google Verticals vs. Google.com: What is Google's end-game?” I put forth Google’s shrewd third party content exploitation strategy:

Google aims to obtain, control and own more content, cost-free to Google, for inclusion in its core search product via a no-cost content acquisition strategy through various Google Verticals…

The allure of surfacing “Google Base content in Google search results” is attracting more content uploads to Google from content owners. Once Google obtains and controls content owners’ content, however, a Google AdWords pitch is what is often surfaced.”

2) Google will have direct access to the confidential financial, inventory, client, employee and sales data of QuickBooks users.

In “Next Google Apps targets: Intuit QuickBooks, MS Money?” I enumerate the sensitive data exposure risks to organizations:

A Google hosted financial application, in fact, might very well represent the most ominous of Google’s prospective collection, analysis, archiving and retention of organizations’ and individuals’ private data:

Client Lists
Vendor Relationships
Contractual Agreements
Salary Negotiations
Tax Returns
Asset Base
Liability Profile
Insurance Policies
Inventory Levels
Sales Records…

Google CEO Eric Schmidt unwittingly made a telling remark during the conference call announcement today of Google’s direct integration into Intuit’s QuickBooks:

All of your (QuickBooks user) critical data stored in a server in the Google cloud.

Google’s “cloud” does not have a good track record, as I disclose in “Free GMail: the high price you pay”:

Do you believe the contents of every personal and business email you ever write or send should be recorded and permanently archived on third party servers located in countries throughout the world, to which you have no access?

If you are one of the millions of GMail users, you have indicated to Google that you most certainly do.

ALSO SEE:  Google's not so 'fine print': Google Apps TOS put Google first and Google targets $100 billion Yellow Pages industry?

UPDATE: Google QuickBooks 2007: Death of Yellow Pages, local newspapers?