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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel?
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To: Robert Sloan who wrote (7897)7/12/1999 12:01:00 AM
From: Erik T  Read Replies (3) of 20297
 
I am still not sure why an IntuitCheckfree takeover/merger wouldn't be a good business plan.

Robert,

I would be interested in hearing TLindt or Benny post some thoughts on this.

I think in order to figure out whether this would make sense, you need to answer three questions:

1) Why did Intuit sell its Intuit Services Corp. to Checkfree in 1997?
I don't have enough info to answer this question fully. It probably included such things as: didn't think they could reach economies of scale alone, wanted to focus on software division as MSFT was trying to take-over PFM market, didn't want a money-losing business at a time when stock price was low, and many more probably.

2) What has changed since then? A lot!!! The internet was pre-explosion when sale occured. Intuit has held on to dominance in PFM market. Intuit has big alliances with AOL, Excite@Home and has Quicken.com. Lots of potential customer there. Checkfree has a profitable business. And much, much more.

3) Would there be synergies created by combining the two companies? Could probably make an argument either way on this one.

I think an Intuit takeover makes much more sense than a Yahoo! takeover. I still think Checkfree is better off on its own. If Intuit wanted to give me $100/share tomorrow, rather than wait a couple years for possibly $250, I think I would be up for it.

Erik (IMO)
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