6 Intuit's Equity Stake in Excite Creates Banking's Version of

When Intuit bought a $40 million stake in Excite, an Internet search operator, large banks likely gasped at the potential threat to their collective customer base. "The Intuit-Excite alliance is bad for large banks because it competes for customer attention and makes product selection more competitive," says Piper Jaffray's Bill Burnham, senior research analyst, electronic commerce. "For smaller financial institutions and product specialists, it will level the playing field by providing an additional avenue for them to sell products."

In June, the two companies announced plans to enter a seven-year agreement to launch a financial on-line channel to feature content and services to help consumers organize and manage their personal finances. More than 10 million consumers already use Quicken, Intuit's personal financial management software. Excite, a leading search engine, directory and content technology company serving the mass consumer market, counts 2.5 million daily users, which is expected to grow at a rate of five percent monthly. Excite users spend a half-hour a day on the Internet and at least five minutes in a search capacity, according to "Electronic Payments, Commerce and On-line Financial Services," a BancAmerica Robertson Stephens report. "This is the on-line financial services equivalent to the Jerry Seinfeld show. They charge a premium for advertising rates. Banks pay to play," explains Gary R. Craft, senior analyst at Robertson Stephens & Co.

Already 14 major financial institutions and insurance companies have committed $10 million to appear on the site in the next year. Large banks such as Wells Fargo and Bank of America have tried to set up a financial network on their own, but together the nation's top 20 banks and insurance companies get less Web traffic than Intuit. The pitfall to the alliance could prove to be the speed of electronic commerce development. The Intuit- Excite deal will succeed only if the two companies can keep up with the evolving field-and well-heeled competitors such as Microsoft. W.Royal