Intuit sells local bill subsidiary

Intuit Inc. made a major strategic change Monday in the way itapproaches the online banking business, saying it will sell itsmoney-losing Downers Grove-based bill payment operation and refocusits banking software design for the Internet.

CheckFree Corp. will acquire Intuit Services Corp. in a stockdeal worth about $258.3 million. None of the 180 employees inDowners Grove or Aurora are expected to lose their jobs, said BillHarris, executive vice president of Intuit, based in Mountain View,Calif. At the same time, Intuit will buy about 23 percent ofCheckFree, a leading provider of check-processing services.

The announcement came as Intuit, which is facing morecompetition in the Internet end of the online banking business,reported a wider loss in the fourth quarter. Just last week, IBMannounced that a consortium of banks - including many existing Intuitcustomers such as First Chicago NBD Corp. - will be startup investorsin a company that will allow bill payment and full banking serviceson the Internet.Intuit's popular Quicken software is expected to be part ofonline banking no matter who provides the actual service, butMonday's announcement means that Intuit will be out of the mostlabor-intensive part of the banking business - the clearing andrecord-keeping end - and solely in software development. Intuit haddrawn criticism from banks saying that Intuit's participation inclearing and record-keeping made it more a rival than a partner.Wall Street liked the move, sending Intuit up $2.12 1/2 to$32.25 a share.Essentially, Intuit's move indicates how online banking ismoving into truly wide-open territory. During the last few years,banks that have offered "online" banking have really been offeringservices tethered between their computers and their customers' homecomputers.Now, software developers and banks are moving on to the nextstage - offering true banking on the Internet - and no one knows whothe winners will be. Internet banking stands to reach many morecustomers but with exponentially higher security and serviceconcerns.Intuit's primary competition in the home banking softwarebusiness is Microsoft Corp., which makes the Microsoft Money programused by some banks.