Microsoft Corp.'s decision to offer its personal finance software for free has upped the ante in the struggle for home banking dominance, bankers and other observers said last week.

The software giant said it will make copies of Money for Windows 95 available via the Internet for two months without charge. Consumers will be able to download Money from Microsoft's site on the World Wide Web, beginning Aug. 24. Money is second to Intuit Inc.'s Quicken in the personal finance market.

Timed to coincide with mass-market advertising and the launch of a broader computer banking initiative, Microsoft expects its promotion will help banks by "further facilitating their on-line distribution," said product manager Matt Cone.

Experts said the software giveaway - perhaps the most aggressive move yet relating to on-line banking - shows Microsoft's resolve to gain PC users' loyalty and overtake its onetime acquisition target, Intuit.

Intuit's Quicken program has some seven million users, compared with Microsoft Money's one million.

"Offering Money free for two months goes way beyond what Intuit announced last week," said Michael Killen, president of Killen & Associates in Palo Alto, Calif., referring to Intuit's kickoff of its own on-line banking service.

"Since (Microsoft) didn't acquire No. 1, it wants to become No. 1," said Mark Burns, vice president for on-line services at Chase Manhattan Corp., which is working with both Intuit and Microsoft.

Mr. Burns said he gives the Quicken product credit for having better "analytical functions," but sees the two packages as pretty even in terms of convenience.

Daniel J. Herbeck, president of Marquette Banks' direct banking division, agreed that Quicken "goes deeper" than Money, while the two are equally easy to use. He added, "I don't think (Microsoft will) take Quicken users away from Quicken."

Gene Galloway, executive vice president at Sanwa Bank of California, another partner of both software companies, said he had "thought that more people would be drawn to Quicken," but he sees most of Sanwa's non-Quicken customers "migrating to Money."

"From a marketing point of view, (the software companies) are much smarter than bankers," said William M. Randle, a senior vice president at Huntington Bancshares, Columbus, Ohio.

Mr. Killen said Microsoft also may be playing on bankers' fears that Intuit will lose its dominance: "The last thing any bank wants to do today is bet on technology that's not a standard."

Some bankers are still apprehensive about Microsoft's market power and apparent desire to dominate.

"They don't intend to make money on the software," Mr. Randle said. "They intend to make it on the connectivity."

Mr. Randle, who has long been rallying banks to develop and control their own remote banking strategies, said Microsoft is moving closer to playing "a platform navigator role," which would relegate banks to a secondary position.

"I find it hard to believe that some banks will continue this strategy for any length of time," Mr. Randle said.

In the official unveiling of the new version of Money last Thursday, Microsoft formally named the 17 banks that have signed on as partners. Most had already announced their involvement with Microsoft.

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