Google and Intuit StepUp to the Plate
Intuit and Google announced a series of landmark deals today at 12 p.m. PDT that have the potential to transform Internet marketing for small and medium-size businesses. The deals involve several Google components that will be bundled in the U.S. versions of QuickBooks 2007.
Google AdWords will be marketed to QuickBooks users, including a US$50 credit toward AdWords services. Businesses that use QuickBooks will also be able to sign up for a free Google Maps listing that can include store information, hours of operation, payment methods, directions, services, specialties and coupons. The bundling of these features (preloaded on the QuickBooks install disk) makes it easier for Intuit's installed base of SMEs (numbers below) to avoid some of the challenges of building, hosting and updating a Web site in favor of a simple business listing on Google Maps.
Intuit has also acquired StepUp Commerce for US$60 million. StepUp is an emerging local online shopping company that specializes in extracting live retail product inventory from small and medium-size businesses’ point-of-sale systems. StepUp will deliver the service under the QuickBooks brand and power QuickBooks new product listing service that is fed into Google. This leverages an existing relationship between Google and StepUp.
QuickBooks has an installed base of 3.7 million SMEs of which 50 percent are product-based businesses — StepUp's target market. Quicken accounts for an additional 3 million SMEs. Recently, Intuit rolled out point-of-sale inventory management software and has quickly grown to an installed base of 50,000. Overall, it maintains an 89 percent share of the retail market for these software-related services.
"Retailers have struggled with past directory models. They never really fit into Yellow Pages because a Yellow Pages listing never really conveyed what products they actually sold," StepUp CEO Kendall Fargo told us yesterday. "So this deal combines Intuit inventory capabilities and our system of feeding it into Google where products can be found and consumers can be easily directed to those independent retailers."
The bottom line is that this is a watershed deal that could transform online and offline retail shopping for SMEs and, importantly, vastly improve the consumer search experience around product information on the Internet. ComScore data indicate that people are browsing online and in many cases — like the purchase of durable goods — want or need to purchase them at local stores. The combination of Intuit, Google and StepUp eases this online-offline purchase funnel, which has traditionally been a challenge to manage and track in the local search space. This combination also has the potential to solve many of the current challenges that have kept small businesses from actively pursuing Internet-based marketing solutions, including delivering retail inventory feeds to the Internet.
Previous to Intuit's point-of-sale software release, software that managed retail inventory was only used by big-box retailers like WalMart and Best Buy. This is one reason why large retailers dominate Internet shopping engines. Before, the data were not in a format or inventory system that SMEs could extract and push out to the Internet, nor was there a place for them to push the information. Now, big-box technology and marketing is delivered to small businesses in an integrated solution. QuickBooks will be the delivery channel, and not an insignificant one. This is a powerful channel gained by both Google and StepUp. The question is, how will this product bundle resonate with Intuit's installed base? My guess is very well.
For more on this deal, we released a client Advisory at noon PDT that can be viewed by logging in to the My Kelsey section of the Web site. A summary is here. A teleconference will also take place at 1:15 p.m. PDT today with Intuit CEO Steve Bennett and Google CEO Eric Schmidt. To attend the conference call, dial 866-837-9787 in the U.S. or 001-703-639-1424 from international locations. No reservation or access code is needed.