Financial software specialist Intuit Inc, in its stated effort to concentrate more energy on the internet, has taken a $40m equity investment in financially frail Excite Inc, and the two companies have formed a seven year agreement to program and distribute a new online financial channel. The new channel will be carried on the Excite network and Intuit’s Quicken Financial Network. It will expand on Quicken’s current network with a variety of web-based offerings, enabling users to access financial news, information and interaction with financial institutions. Financial products, such as insurance and mutual funds, will be promoted and sold online. Revenues are expected to come from advertising and processing fees for transactions conducted over the network, but the companies would not comment on how revenue would be shared. As part of the deal, Intuit becomes the sole provider of financial content for all of Excite’s services, and Excite becomes the exclusive search engine featured in Intuit’s Quicken, QuickBooks and TurboTax products. Quicken’s installed base of 10 million is expected to generate a significant portion of the new network’s users. In the transaction, Intuit will purchase 2.9 million shares of Excite common stock at $13.50 per share, giving it a 19% stake, roughly equal to the 20% stake that America Online Inc holds after handing over the WebCrawler search engine in December (CI No 3,140). There is no word yet as to AOL’s possible involvement in the new network. The investment comes as a relief to Excite, which reported first-quarter losses of $8.8m in April (CI No 3,140). Recent developments pointing to Intuit’s increased focus on the internet were last month’s sale of its Parsons Technology unit to Broderbund Software Inc (CI No 3,171) and this week’s announcement that it plans to cut about 270 jobs, or 10% of its workforce. The company is consolidating its technical support facilities in the US and Europe, as it feels with increased internet activity the need for such support will undoubtedly fall off.
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