Qucken.com Case Followup

Management Problem How should Aldrich change the firm’s business model?

Current Business Model Vertical Portal –Marketplace business model Enables customers to complete their purchases online Does not take ownership of inventory Doesn’t allow bidding or negotiation –Revenue sources Fee revenue for competed transactions ASP, system integration and hosting fees Existing non-Internet brand

InsWeb Aggregator Business Model –Provides quotes and generates leads for 36 insurance carriers Revenue –Charges a referral fee for each qualified lead –ASP WebIns has direct link to each carrier’s transaction and database system Pure-play Internet business

AOL and Yahoo Horizontal Portals –AOL: revenues from advertising and referrals, subscriptions, ISP services –Yahoo: independent platform for information and service providers. Available at anytime from any platform anywhere.

Trust and Awareness Great brands built on trust and awareness –Widespread name recognition and loyalty Trust that firm will follow through on committments –Vertical portal needs integrated marketing campaign Marketing each of Quicken.com’s businesses Position each business to be consistent with the umbrella brand

Expansion Success on the Internet tied to rapid growth Evolution of the business plan

Vertical Portal Communicate businesses offered today Prepare customers for future expansion –Intuit well known brand Quicken for financial management TurboTax Quicken brand still stands for original software to many

Postscript November 2000—Intuit announces that it is “selling selected assets” of QuickenInsurance business to InsWeb Intuit received 16.6% equity stake in InsWeb InsWeb became exclusive consumer insurance Aggregator for Quicken.com for 5 years. Intuit to receive % of each transaction

Impact Intuit gained equity stake in InsWeb Deal prevented others from taking over InsWeb at low price Gained access to InsWeb’s stronger insurance offerings Maintained revenue stream from each transaction

Some insights Jury still out on financial services –Businesses that position themselves close to customers and offer the best value, most likely to win –To be successful, Intuit must engage its customers. –New offerings, e.g., My Citi, may be threats –Networked businesses must not be static Enhance products Expand product offerings Extend into new businesses