Should Google really buy Intuit?

The very day that Google announced “Google Apps for Your Domain,” last August, I put forth: “Next Google Apps targets: Intuit QuickBooks, MS Money?”  Today, Nick Carr says “Google should buy Intuit”  Really?
Written by Donna Bogatin, Contributor

The very day that Google announced “Google Apps for Your Domain,” last August, I put forth: “Next Google Apps targets: Intuit QuickBooks, MS Money?” 

Today, Nick Carr says “Google should buy Intuit” 

Really? On what does Carr base his Googley M & A advice?

Carr mentions a low traction, small-business facing “SaaS” version of an Intuit application to support his “What's not to like?” Intuit-Google hypothesis.

QuickBooks Online Edition, Carr glows: “85,000 subscribers (growing at a 50% annual clip), making it one of the most popular Web-based business apps.”

Carr does tame his enthusiasm a bit, however, “QuickBooks Online is a fairly rudimentary accounting program.”

Nevertheless, Carr advises: “Right now, it would be an ideal complement to Google Apps. Roll an accounting/payroll service into Google Apps, and you have a suite that literally covers all the software required by a whole lot of small businesses. And you have a strong base for moving up into the mid-market.”

Upon the launch of Google Apps seven months ago, I underscored Google Apps is missing a Web-based accounting and finance software application!

I said, way back then: 

Google has unleashed an integrated suite of Web-based software-as-a-service office productivity applications—Google Apps for Your Domain.

What’s missing? A Web-based accounting and finance software application! After all, if Google wants to compete head to head with Microsoft on software, why stop at Microsoft’s current core Office applications? A MS Money type hosted application would be a perfect Google fit to tout online banking, online bill pay…

Microsoft is currently promoting a free “CD trial kit” with a trial version of Small Business Accounting 2006; the boxed product sells for $79.99 at Amazon.

Intuit, however, is already featuring a QuickBooks online accounting software edition, and targets the lucrative business and retail markets. QuickBooks online subscription starts at $19.95 monthly.

Intuit touts Quicken: “See where your money goes.” Google would undoubtedly be interested in seeing where organizations’ “money goes” and having “all the world’s” financial data “all in one place.”

Today, Carr offers rationale similar to mine of last August:

Intuit also, of course, has Quicken, the leading personal finance program, which is another natural for moving onto the Web. And it has the leading tax preparation program, TurboTax, which has already moved to the software-as-a-service model with the popular TurboTax Online. Weave this stuff together with Google Finance, run it on Google's infrastructure, and you've got the makings of the dominant personal finance service.If Google were to buy Intuit, it would also fulfill another of its core goals: annoying the hell out of Microsoft.

Carr’s closing argument: “And just a few months ago, Google and Intuit announced a major strategic alliance, so the lines of communication are certainly open."

The Google-Intuit lines of communication may indeed be open, but they do not appear to be bearing any fruits!

Carr references the Intuit Inc., first quarter, fiscal 2007, conference call remarks, November 16, 2006, as the source of his QuickBooks Online Edition stats.

Another year, another Intuit fiscal quarter, however.

On the heals of Intuit’s second quarter, fiscal 2007, report to Wall Street last month, I underscored “Microsoft trumps Google in Intuit QuickBooks.”

Steve Bennett, CEO, Intuit, expressed scant enthusiasm for the results to date of the “major strategic alliance” between Intuit and Google.

I wrote last month:

Last week Bennett reported F2Q07 earnings to Wall Street, touting “Intuit delivered another solid quarter with revenue and non-GAAP EPS above the high-end of our guidance range.” No thanks to Google, apparently.

The Intuit-Google “best-in-class” partnership was not mentioned in Bennett’s prepared remarks designed to present the factors responsible for the Inutit “solid” performance and to outline ‘how Intuit will continue to grow.”

Asked by an analyst about the Intuit-Google alliance which had been deemed by the companies to forge “Two companies, one powerful solution,” Bennett only offered: “I would tell you its still early and we haven't seen a huge lift on that yet.”

I also underscored:

What’s more, Google’s new productivity application nemesis Microsoft, is enjoying favored status within QuickBooks, but not Google Apps.

Carr also handily offers a “back of the envelope” deal analysis: "The acquisition is certainly do-able. Google's current market cap is about $137 billion. Intuit, a nicely profitable company, has a market cap of just under $10 billion, with a little over $1 billion of cash on hand."

It would most certainly be "do-able" for cash rich Google, just like the $1.65 billion YouTube acquisition was "do-able!"

Google’s total cost of its YouTube deal, of course, may be revised upwards by the tune of $1 billion, payable to Viacom!

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