Intuit Says ‘I Don’t’ to Bill-Paying Unit, in Bow to Pressure

Intuit Corp. bowed to the pressure of the Internet on Monday, dumping its electronic-bill-paying subsidiary and changing strategies so its top-selling Quicken financial software works better with the global network.

Also, as expected, that company said it lost money in its fiscal fourth quarter ended July 31, and it forecast slower revenue and profit growth for the next 12 months.

Intuit sold its bill-paying unit, called Intuit Services Corp., to CheckFree Corp. for $227 million worth of stock, giving Intuit a 23% stake in CheckFree.

Most people are familiar with CheckFree: A store clerk uses it to validate a customer’s check. The company also provides other processing and software services for businesses.

Intuit also said it will modify its Quicken program to allow computer users to connect directly with financial institutions through the Internet.

Currently, people can use Quicken to bank electronically only if their bank has a relationship with Intuit and uses Intuit’s private network.

The shift reflects both competitive pressures and a slowdown in the growth of new PC users at home.

In addition, some bankers have been worried that Intuit is trying to insinuate itself between banks and their customers.

As a widely available network that is also used for many other purposes, the Internet presents a less costly way for banks to make an electronic connection with their customers, including those who don’t use Quicken.

Intuit executives said their decision was driven by both banks and consumers and an impression that Internet has become technically safer.

Analysts said Intuit is also feeling pressure from rivals such as Microsoft Corp. and International Business Machines Corp., which last week announced a venture with 15 large banks to develop electronic banking products.

Separately, Intuit said its loss widened in the May-July quarter, the fourth of its fiscal year, after recording the cost of buying Interactive Insurance Services.

Intuit lost $21.98 million, or 48 cents a share, on sales of $91.13 million in the quarter ended July 31. A year earlier, the company lost $1.43 million, or 3 cents a share, on sales of $72.40 million.

The performance met the expectations of Wall Street analysts. Intuit’s stock Monday closed up $2.125 at $32.25 on Nasdaq.