Sam:
A rejoinder to buffet's comments:
1. Within 1 week everybody here and elsewhere will have forgotten about the lawsuit and life will go on as usual. I don't think this lawsuit is a big deal because: a) judges rarely issue temporary injunctions (TI) except in cases of "irreparable harm" with burden of proof to plaintiff.
Right, there probably won't be an injunction for exactly the reason stated. But what the market cares about more is the apparent rift btw INTU and CKFR, and if it's real, then it won't go away in a week.
2. INTU is YHOO-envy because their shi*ty site is not and will never be considered a portal. Their sale of XCIT shares may be a symbolic attempt to distance itself from other competitors and unwillness to make strategic alliances. And CKFR's agreement with YHOO will make INTU's competitor (YHOO) stronger, hence the violent reaction. INTU should be thinking about how to make their portal stronger by entering into strategic alliances, and other actions, instead of pissing off XCIT CKFR and every other competitor with a no-bar's-hold strategy.
Quicken.com a not so shi*ty site, traffic wise. Check the numbers; they're consistently in the top twenty each month. More importantly, think about the Quicken/Quickbooks installed base. Here on this thread we complain about this strong arm tactic (lawsuit), but as you said yourself the software is the best out there, and I would guess that most of us found our way to CKFR thru Quicken. This may change in the future as the portals come up, but today the rest of world is no different. I think the Wintel analogy is a good one.
3. INTU has excellent personal software in Quicken, a financial website ... so why not also allow people to make financial transactions such as EBPP? Hey, let's steal the technology from our little sister ... *%#@ off, came the reply. EBPP is a natural extension of INTU's business and this sector will take off very soon, but INTU is only realizing these facts way too late. Their lawsuit is a way to strong-arm tactic to get as much concession out of CKFR as possible.
Not sure how INTU is stealing from CKFR. INTU undoubtedly regrets the failure of ISC, and may be overreaching with this suit. What we need to determine is whether they really have the ability to compete w/CKFR (not demonstrated so far) or are willing to ally with someone who does. If they press this fight, they may scorch the earth for both parties for a while, and IMO this is what is hitting CKFR stock.
4. CKFR was, at one point a little sister to INTU, but not anymore. INTU needs CKFR more than CKFR needs INTU. Without the EBPP technology and inability to make financial transactions, INTU cannot hope to be a portal or derive fees from banking transactions. The portals are undoubtedly eyeing the potential of EBPP and would gladly share with pie with CKFR. Without CKFR, who will INTU turn to? Arch-enemy MSFT? Yeah, right.
As Tom said, this is the central question. In a sense, it's like asking "Which has greater value: the client or the server?" Quicken adds great value on the client side for bill payers, but CKFR does too. On the server side, Intuit brings Quicken.com, but not a whole lot more. CKFR links to a whole world of billers, and makes sure the transaction gets done right and on time. Critically, CKFR also saves billers huge amounts of money. Which is more valuable? As buffet says, a year or so ago the edge might have gone to INTU. Today, after CKFR has built out their system and is looking to deal with the portals, the edge may go to CKFR. This fits with the general trend toward greater "server power".
Finally, it doesn't have to be either/or, unless INTU wants it to be. Pete undoubtedly recognizes this, as he did with the bank/portal issue. Right or wrong, the market may be concerned about burning bridges. First the banks, now (potentially) INTU. If they throw in entirely with the (as yet unproven) portals, risk goes up.
Charlie |
