William Wong, Vice President, Research, Josephthal & Co.
Interviewed by John Bishop
June 8, 2000

The Internet Analystsm recently spoke with William Wong, vice president of research at Josephthal and Company about INTUIT (INTU). Mr. Wong believes that INTUIT is well positioned to use the growing importance and ubiquity of the Internet. Josephthal & Co. has not acted in an investment banking capacity for INTUIT in the last three years. Mr. Wong owns no INTUIT stock.

[THE INTERNET ANALYST – JOHN BISHOP] What does INTUIT do?

[WILLIAM WONG] INTUIT develops and sells software for small business accounting, tax preparation, and consumer finance. It boasts the leading portfolio of software for small business (QuickBooks), tax preparation (TurboTax), and personal finance (Quicken and Quicken.com). Quicken, QuickBooks and TurboTax have leading market shares of 70%, 80% and 70%, respectively. Added to that, INTUIT is well positioned to use the growing importance and ubiquity of the Internet. Quicken.com is already one of the most popular finance portals. The firm is just beginning to leverage the strength of these brands and a captive base of 18 million installed users.

[JB] INTUIT seems to have been overlooked during the past several years. What accounts for that?

[WW] INTUIT used to be just a software company, and people thought, "TurboTax, what's so exciting about that?" But INTUIT has been able to use the profits from its software business to subsidize its aggressive Internet strategy. Right now, one out of every four dollars the firm earns is related to the Internet. A lot of customers who have never used their software are now using the online versions. We think this company has one of the strongest e-commerce franchises out there.

[JB] What kinds of new developments can we expect from INTUIT?

[WW] INTUIT announced a partnership with Andale, a privately held, online-auction management company, which will give its 2 million QuickBooks users auction capabilities through EBAY (EBAY), AMAZON.COM (AMZN) or YAHOO! (YHOO). INTUIT has also been the first to focus on electronic bill payment. Right now, there's a chicken and egg situation where the billers won't participate until the customers are online and the customers won't participate until the billers are online. But INTUIT is making a deal with AMERICA ONLINE (AOL) to leverage their 21 million domestic customers.

[JB] What is your rating on this stock?

[WW] I rate the stock a BUY with a 12-month price target of $50. I estimate this year's earnings to be $0.65 a share, and revenue for 2000 at $1.08 billion, and $1.24 billion for 2001.