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Dropping, not raising retail prices, may be a better move for INTU, Michael, IMHO. INTU's best long term strategy maybe lies in set-up and wholesale transaction charges to banks, mutual funds, insurers and other financial institutions for enabling their customers to access financial services quickly and easily ... and the leverage of INTU's excellent brands and "shopping sites" (like qfn.com and insuremarket.com) to steer users to particular financial insitutions.
Just as MSFT and NSCP and McAfee have shown us, offering more and more software value for less money is a way to make your product (or to use the Gillette analogy, the razor - Quicken or Turbo Tax) ubiquitous so that you can make money on the transactions (the blade -- charges to banks, mutual funds & insurers) that enable customers to access commercial clients.
I'm not talking about the Checkfree (http://www.checkfree.com) sort of *retail* transactions, but the *wholesale* transactions that I sense the institutions will pay for ... INTU is diminishing its share in CKFR, as a 13D recently filed shows ... INTU sold 2 MM CKFR for $29 million on 2/5, according to Barrons 3/31 edition out today (http://www.barrons.com), which reports INTU continues to hold 19.6% (10.6 million shares) of CKFR, which at a recent close of $11.50 is worth $123 million.
In all, INTU's 1/31 balance sheet shows $455 million in cash and maretable securities. I'd expect them to be acquirers in the coming fire sale in software companies.
Doug |
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