Intuit yesterday announced that it would sell its Quicken unit, the group that creates the personal finance software that made the company famous.
The news -- and Intuit management's explanation for the sale -- illustrated the retreat of personal computer desktop software and the rise in cloud- and subscription-based services. It also distressed users, who wondered whether the banking and investment software would survive, and if not, how they would replace a program they've relied on for years, sometimes decades.
On a conference call with Wall Street analysts Thursday, CEO Brad Smith said Intuit would focus on its small business and tax software, represented by QuickBooks and TurboTax, respectively -- both have strong cloud- and subscription-based businesses -- and is ditching Quicken because, as a strictly desktop product, it has neither.
"As you know, Quicken is a desktop-centric business and it doesn't strengthen the small business or tax ecosystems," said Intuit CEO Brad Smith in a conference call with Wall Street Thursday. "Our strategy is focused on building ecosystems and platforms in the cloud. We value our loyal Quicken customers and we're seeking a buyer who will provide the product support and the service they deserve."
"I expect Quicken to be dead in two years at best," predicted someone identified as "rickbee9," in one of several comments on the Quicken discussion forum thread about the proposed sale.
Others questioned Smith's explanation, saying that Intuit is simply ditching its weakest money makers to make its balance sheet look better. "[It's] clear that Intuit is divesting itself of the lowest revenue items, no matter how they spin it," wrote "smayer97" on the same thread. "It is clear that this has nothing to do with which segment classes of products they are keeping vs. not ... they are clearly only wanting to keep the top revenue items."
The three units Intuit plans to sell -- Quicken, QuickBase and Demandforce -- accounted for less than 6 percent of the firm's fiscal 2015 revenue, and just 2 percent of its net income during the same period. For the last 12 months, Quicken contributed just $51 million to the company's total revenue of nearly $4.2 billion.
One indicator of the soon-to-be-sold units' worth in investors' eyes is that not one Wall Street analyst asked a question yesterday about their proposed sale.
In a FAQ about the Quicken sale, Intuit asserted that it would find the right home for the personal finance software. "We are seeking a buyer that recognizes the value of the brand, respects the customers and will invest in upgrading the product and support experience," said Intuit. "We intend to run a crisp process, focused on engaging with strong and reputable buyers."
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