I attended Intuit's (NASDAQ:INTU) annual shareholder meeting on January 19, 2011. CEO Brad Smith was his usual effervescent, charismatic self and handled the informal presentation.
Several items stood out:
- Intuit sees the market shifting from DIY to "We do it for you." For example, look at Quicken. It automatically downloads information for you and renders much of the accounting process automatic.
- Smith drew laughs when he said that these days, when someone asks whether you can type 60 words a minute, the answer is still yes -- and he then proceeded to mimic the motion of cell phone texting. His point was that Americans are using mobile phones to replace older technology, and Intuit was ahead of the curve.
- Smith is focusing on growth in Southeast Asia and India, although Intuit does not offer tax prep services in India. Instead, Intuit's businesses in that country revolve around helping small businesses advertise, especially through the use of mobile phone services.
- One of the coolest new products is Snaptax. Taxpayers filing 1040EZ forms pay only $14.99 when filing their tax returns, which is a good return on investment if you receive any kind of substantial IRS refund. More info on the product is here.
During the Q&A session, Smith explained that his team had chosen to focus on the PC version of Quicken after Apple's (NASDAQ:AAPL) woes many years ago. Recently, however, Intuit developed a Quicken for Mac version from scratch called Quicken Essentials. This new software is only a few months old, and Smith said he hoped customers would understand the difference between Quicken for PC -- which has decades' worth of improvements -- and Quicken Essentials for Mac, which is a work in progress.
I asked how the government was helping and hindering Intuit. Smith said that he hoped for a mutually beneficial partnership with the government, but noted that at the same time, the government can be a hindrance when it seeks to provide tax preparation directly to consumers, which is not the government's core competency. Each side should stick with what it does best, said Smith.
On another note, I was really happy to get the opportunity to briefly chat with Intuit co-founder Scott Cook after the meeting. Cook, lest we forget, helped Intuit beat Microsoft (NASDAQ:MSFT) during its heyday years when it tried to foist Microsoft Money on the public. In an ironic twist, Microsoft's software ventures outside of its dominant operating system software have been failures, primarily because it keeps trying to compete with other natural/quasi-natural-monopolies like Intuit.
I mentioned to Cook that I wasn't so keen on the idea of looking for growth and profitability in India; its very fragmented consumer marketplace makes it very difficult for any company to establish a dominant foothold (which harms a company's ability to increase its margins), and it also has poor infrastructure. Most analysts who focus on India use financial projections based on overly optimistic macro factors (i.e., multiply anything by a billion and it looks like you can make lots of money). Cook politely explained that the first step was to generate revenue, and then profits.
Disclosure: I own an insignificant number of Intuit (INTU) shares. I participated in one paid Intuit survey in 2010.