Google, Intuit Challenge Microsoft's Desktop Dominance

In a move that further encroaches on Microsoft's desktop dominance, QuickBooks 2007 will integrate tools that allow customers to list their businesses on Google Maps, create and manage ad campaigns with Google AdWords, and post their products to Google Base. Google Desktop will also be made available through the QuickBooks interface.

QuickBooks is used by over 3.5 million small business customers and 230,000 accountants, according to Intuit. QuickBooks 2007 is scheduled for release in the fall of 2006. Representatives from both companies said the QuickBooks deal was only the beginning of the partnership.

"We take this long tail business very, very seriously," said Google CEO Eric Schmidt, in Mountain View, Calif. "In looking around and studying it, we became convinced there was a way to get at least 1 million more customers into the AdSense network."

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Those customers will ostensibly come from QuickBooks' 3.5 million users, over half of which do not have a Web presence. In the case that a QuickBooks customer does not have a Web site, Google will automatically create a Web site.

Ivan Noel, president of Oscar and I Computing Solutions, in Beverly Hills, Calif., a Microsoft Small Business Specialist, sells both QuickBooks and Small Business Accounting, but very little of the latter. Microsoft has failed, he said, to make a compelling case for a technophobic market to make the switch from a tried and true product.

Intuit's collaboration with Google was likely to make that case even more difficult, he said.

"It's hard to get people to move away from QuickBooks anyway," Noel said. "Most accountants are not computer-savvy. They don't like change. Even though it looks and feels similar, it is different enough. They're used to QuickBooks and they're used to Google. I mean, who doesn't use Google?"

Microsoft SBA integrates better with Microsoft applications and proves better performance when networked, but that fact fails to budge offices where only an administrator and the boss are using the software, Noel said.

"If QuickBooks is now even sexier, it will only make it harder to move users," he said.

According to Google, QuickBooks integration with AdWords will allow users to select search terms related to their products or services and create ads that show up when shoppers search on Google for those products or services. Google will offer QuickBooks users a $50 credit when they begin using AdSense, although they must pay a $5 activation fee when they begin using AdWords.

"The problem we have here is that people are not online," Schmidt said. Once users get online they will start to advertise with AdWords and eventually AdSense, he said, and once they experience success with advertising, which previously had been too expensive, customers will be able expand their businesses. "Then all of a sudden they access all the other services, and it all compounds."

QuickBooks 2007 will also allow users to automatically transfer inventory information to Google Base through Intuit's new QuickBooks Product Listing Service. That feature is powered by StepUp Commerce, which Intuit acquired Sept. 13.

Google recently integrated its payment processing service, Google Checkout, into Google Base. Currently there are no plans to integrate Google Checkout functionality into QuickBooks, but Intuit CEO Steve Bennett said, "That's a good question for us to think about."

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According to Schmidt, Intuit and Google are following similar strategies to unlock customer data from proprietary desktop models. Schmidt referred to Google Apps for Your Domain as another Google product that follows this strategy.

QuickBooks will be able to access all the Google services via a Google icon on the QuickBooks start-up screen.

Integration with QuickBooks will also allow users to create and manage listings for their companies on Google Maps.

Intuit said it expects to sell 1.5 million units of QuickBooks 2007 in the following fiscal year, and an additional 1.5 million units the following year.