Intuit has all those small businesses using its QuickBooks accounting software. Roughly 1.85 million QuickBooks SMEs sell products, while another 1.85 million are SOHOs, law firms, medical offices etc.
So why has Intuit been kind of a loser on the Web? It initially did OK with AOL in the 1980s and early 1990s. But a subsequent joint venture with Excite never lived up to its potential. More recently, around 2003, the company tried to incubate a small business portal on its own, but the project never left the starting gates, to the great frustration of many partners.
For better or worse, the explanation for Intuit’s lackluster performance online has been that its customers don’t accept Intuit as a marketing solution. While Intuit remains a very potent force with the SME community, its core strength remains the complex accounting issues faced by SMEs, and the ever-deepening opportunities they represent.
Two new announcements that came out yesterday fully reflect this. The headline grabber has been Intuit’s big deal with Google, a marketing/outsourcing arrangement in which Google’s brand and search box will be prominently plastered all over QuickBooks; customers will have $50 worth of Adwords assigned to them, with the signup form automatically filled in; and plenty of links will be provided to Google Base, Google Maps and listings too.
In return, Intuit is probably getting generous bounties, an implicit promise from Google to stay away from accounting software, and the promise of providing real value add to its customers. The Google deal probably ends any hopes that Intuit had of launching a small business portal of its own. But with Google’s ascendance, it may have seen the writing on the wall, and also figured that partnering with Google was better than facing down Yahoo and Microsoft.
Meanwhile, Intuit is shoring up its small business services in several smart ways (see “multiple opportunities” above). This brings us to the second announcement: its $60 million purchase of StepUp Commerce, a three-year-old, San Francisco-based company that helps small merchants get their items found on the Web. Sagely, it integrated QuickBooks into its platform to provide inventory control – a feature that at the time, was considered clunky and non-Web 2.0ish. But the StepUp people clearly knew their market, and the payback, clearly, was in the strategic alliance.
StepUp will be rebranded as QuickBooks Product Listing Service (although existing customers will continue to see StepUp as their brand). The company will likely retain the bulk of its 35 person staff, including President Kendall Fargo, who becomes an Intuit GM. Fargo tells us that plans are to enhance the whole StepUp platform “quite a bit” with Intuit’s resources and know-how.
To me, the $60 million buyout figure is impressive. ShopLocal, a much broader, consumer-facing platform supported by the might of Tribune, Gannett and now McClatchy, has only been valued at $85 million by its owners. Moreover, StepUp, like other local services, has had a tough time on the local sales front: it brings just 5,000 customers to the table, each paying about $50 per month. Many of them do not even use the QuickBooks inventory feature.
But I presume the value is in the top notch infrastructure that it has developed; the staff that is being imported; and the company’s relationships with Google, YellowPages.com, and (for now), MSN and Yahoo. In any case, we’ve been alerted: despite its missteps of the past, Intuit intends to be a significant player in this space.
StepUp is a powerful idea and product. Getting product information, especially product inventory information onto the web is a further step in changing the local search experience.
Why should I have to drive around looking for a replacement cord for my laptop ?
The issue with the product was for it to have an impact possible, it needs to have large numbers of merchants signing up and then actually uploading the inventory information. The combination of Intuit to acquire customers and Google to provide listing capability and local ad inventory will make the powerful idea and product that Stepup has have a powerful market impact.
I think the question that I left unanswed is:” how big a deal is Intuit-Google?” My answer is: It is a “3″ on a scale of 1-5. It isn’t going to cause a revolution, but it is a nice bulding block. Intuit will undoubtedly deliver some SMEs that haven’t focused on buying keywords. Is it more meaningful than a major Yellow Pages sales channel deal? In some ways “yes,” because it will be nicely driven online. The IYP assignation is sometimes obscured.