Microsoft-Intuit Merger Faces Antitrust Suit, Impact on Electronic Financial Services Uncertain

The US Justice Department has filed an antitrust suit to block the proposed $2 billion merger between Microsoft and Intuit, the maker of Quicken, the world's most popular personal finance program. Despite this, analysts say that even if the merger is blocked, it is unlikely to have a significant impact on the rapid development of electronic financial services. The real competition in personal finance will likely come from telecommunications companies, banks, and other financial services companies that are developing home banking, home shopping, and other commercial transaction services for Internet users.

Key Takeaways:

• The proposed $2 billion merger between Microsoft and Intuit would give Microsoft a dominant position in personal finance software, but the Justice Department is suing to block it, citing concerns about stifling competition and higher software prices.
• Analysts predict that the real competition in personal finance will come from telecommunications companies, banks, and other financial services companies that are developing Internet-based services.
• Microsoft's Chairman Bill Gates has stated that the company's success in the on-line universe is far from assured, despite the company's dominance in the personal finance market.
• Intuit's Chairman Scott Cook has stated that the company's business is strong despite the stock market's reaction to the lawsuit, and that the company is unlikely to be open to alternative suitors.
• The Justice Department's decision to sue Microsoft over the merger is seen as inconsistent with their recent rejection of a consent decree with Microsoft, which would have prohibited certain practices that competitors said were unfair.
• Analysts predict that the merger, if blocked, will not have a significant impact on the development of electronic financial services.

Statistics:

• Microsoft's stock price rose $3.125 to $81.75 on Friday, following a slight rise on Thursday.
• Intuit's stock price fell $5 to $67.75 on Wednesday, following a drop of $9.25 on Thursday.
• 70% of the market for personal finance software is currently held by Quicken, which is the personal finance program developed by Intuit.
• Over 150 countries are now connected to the Internet, with tens of millions of users.
• The Microsoft Network, a global computer web, is expected to be introduced in late summer.

Sources:

• "Microsoft, Intuit merger faces antitrust suit" by Peter Bartlett, published in unknown news source.
• "Intuit fires back at Microsoft" by David Coursey, editor of PC Letter, published in PC Letter, an influential computer industry newsletter.
• "Microsoft's money may be made elsewhere" by Peter Breznau, published in unknown news source.
• "Intuit, Microsoft merger on hold" by Debra Heine, published in unknown news source.
• "Microsoft, Intuit merger: a major setback or just a blip?" by Karl Wong, analyst for Dataquest, published in Dataquest, a market research company.