Intuit Taps Hewlett-Packard and Google for Advice

CEO Brad Smith is reshaping the maker of personal finance software by picking the brains of some of the best players in Silicon Valley, including HP's Hurd

By Aaron Ricadela

As first-year CEO Brad Smith tries to reshape software maker Intuit for the online age, he has opened his Rolodex and is cribbing ideas from some tech industry icons.

A dinner with Hewlett-Packard (HPQ) CEO Mark Hurd sparked ideas for a massive benchmarking project and reinforced Smith's conviction that Intuit (INTU) had to lay off 7% of its staff. Conversations with Google (GOOG) inspired a program that lets Intuit engineers contribute 10% of their time to experimental projects. And Smith rang up Facebook Chief Operating Officer Sheryl Sandberg to help Intuit shape online user communities around its products, a feature at the center of the new version of QuickBooks accounting software, announced on Sept. 29.

Smith, a West Virginian who rose through the ranks over five years before becoming CEO in January, is shaking things up at Intuit, which makes the widely used QuickBooks, TurboTax, and Quicken personal finance software. But Intuit shares have trod water for the past two years as revenue growth has slowed and Wall Street has viewed the company as short on new ideas. "The business has been seen by investors as not moving forward in terms of innovation," says Ross MacMillan, a managing director at Jeffries & Co. (JEF) who rates Intuit shares a buy. The stock has slumped 6.3%, to 29.92 on Sept. 29, and is down 4.5% since late September 2006.

Adding to the challenges facing Intuit, online startup Mint.com has garnered a strong following (BusinessWeek.com, 4/17/08) of nearly half a million users in their 20s and 30s who gravitate toward its free, slickly designed personal finance tools on the Web.

Online Payoff

The burgeoning popularity of cheap online tools galvanized Smith's effort to make Intuit's products more Web-friendly. "They gave us a wake-up call," he says of Mint and comparable sites. "Quicken [on the] desktop is pretty much yesterday's news." To wit: Sales of Intuit's Web-delivered software, including versions of QuickBooks and TurboTax, grew 27%, to about $1.5 billion, in the company's fiscal 2008, which ended on Aug. 31. In contrast, desktop products that users install on their PCs grew just 7%.