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November 27, 2007

Why Intuit Will Matter Even More to Your Business: Acquires Homestead Technologies

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I was quite surprised this morning to scan the headlines and see that Intuit has purchased Homestead Technologies - one of the best services for small businesses to build web sites.

Why did Intuit do this?

Intuit's QuickBooksand its related small business products can only grow Intuit so much. Although there are and will continue to be millions of small businesses buying Intuit software, Intuit needs to do smart acquisitions, like buying Homestead, to grow.

The other side of this story is it must find companies with a culture that is like Intuit's (friendly, passionate about customers, and etc). Homestead fits this bill perfectly and its embodied in its founder and CEO Justin Kitch (pictured here playing the guitar).

Read his blog post on the deal here.

Web site building is still a hassle for many small businesses and Intuit's own commissioned study showed that many small businesses still do not have web sites. This is why Intuit bought Homestead.

What does the new, flush with cash, Homestead need to do now?

Homestead needs to now offer more features and split it's customer base into 2 segments. There are those customers who just want a basic web site, a digital brochure. But then there are those who want more - they want blogging, podcasts, RSS feeds and avatars. Homestead, in the next 60 days should quickly roll out these features to this segment of customers.

Homestead should also do all it can to educate customers in segment one, on the benefits that the customers in segment 2 have. Other features for segment 2, or Web 2.0 customers would include blogging software.

What does this mean to your business?

Intuit already has a broad ecosystem of offerings, to help small businesses manage their business - mainly their accounting. With the purchase of Homestead, they now have a service for web site development.

If you are already a QuickBooks users, you can expect that Intuit will offer you more products and services. As Dell is offering a range of IT services, Intuit is and wants to offer more business management services.

What should Intuit do next?

Intuit now needs to to 2 main things. 1) make 1 or 2 more strategic acquisitions for CRM (including email marketing and more online marketing services - maybe via Homestead). 2) They then need to offer these services under one platform - as NetBooks is doing.

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