In Buying Mint, Intuit Looks to Revitalize

Personal-finance software giant Intuit hopes upstart Mint.com will enliven its Web presence in ways classic PC offering Quicken has not

By Aaron Ricadela

Last year, Intuit's legal department sent a threatening letter to Mint.com demanding that the upstart rival in personal finance software explain its breakneck pace of growth. The correspondence was leaked and Intuit was upbraided in the blogosphere for what looked like bullying behavior. Even Intuit CEO Brad Smith later professed dismay. "It looked like Goliath picking on David," Smith said in an April interview with BusinessWeek. At the same sitting, Smith praised Mint's "brilliant" approach to helping consumers manage their money on the Web.

Now, Goliath and David have more than made up. On Sept. 14, Intuit (INTU) said it will pay $170 million in cash for Mint.com in a move that eliminates one of its toughest competitors and may help Intuit attract a wider, more Web-savvy audience.

The acquisition fits with Smith's effort to rejuvenate Intuit's sometimes stodgy culture. During his 20 months as CEO, he's pushed the $3 billion-a-year software company, which traces its roots to the PC boom of the 1980s, to move more of its products to the Web. He has consulted with Hewlett-Packard (HPQ) about cost-cutting and with Google (GOOG) about engineering innovation.

The Mint deal is meant primarily to bolster Intuit's online operations. Quicken Online, launched last year, has been a slow starter and Intuit will now direct customers looking for financial management software on the Web to Mint.com. "That's where the new traffic and customer acquisitions will go," says Mint's CEO, Aaron Patzer, who will manage Intuit's personal finance products, including Quicken, once the deal closes in the fourth quarter. Meanwhile, Quicken Online will become an extension of Intuit's desktop Quicken products, which cost $40 to $50, and are used by an estimated 10 million to 12 million people. Intuit also plans to infuse other products in its line, such as TurboTax, with Mint's technology, which can automatically categorize household and business expenses with a high degree of accuracy.

Mint Thrived Against Intuit's Quicken

Intuit's acquisition of Mint illustrates the line software companies need to walk as they extend their brands on the Web, where products are often free, while protecting revenue from desktop PC programs. It also underscores consumers' desire to find easier ways to manage their money at a time when many are trying to spend less and save more. Mint brings personal finance software "down a level" compared with Quicken, says Brad Strothkamp, a principal analyst at Forrester Research (FORR). "For things like online banking and managing finances, Quicken was a lot more than [many] people needed. Mint provides functions consumers want, but it isn't overkill."

Mint, which costs nothing to use, has attracted 1.5 million users since its launch two years ago. Mint has won plaudits for its attractive and simple-to-use design, which was created in reaction to Quicken's often tedious data-entry process.

The company, which had taken $31 million in venture capital, makes money by directing its customers to partners among credit-card issuers, insurance providers, and other financial-services companies. Mint analyzes users' finances, spending habits, and demographic information, then suggests money-saving accounts and financial products that may be suitable.

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