Intuit Plans to Sell Stake in Excite

Intuit followed America Online to the exits at Excite, saying it intends to sell its nearly 10% stake in the popular search engine being acquired by @Home, the provider of high-speed Internet access over cable lines.

The No. 1 personal finance software company said the decision will not affect its seven-year deal to provide Quicken and other financial services through Excite’s Web pages and that it had not been forced to choose between soon-to-be Excite owner @Home and one of its biggest rivals, AOL. Intuit recently signed a three-year content deal with AOL.

“We made a financial decision to monetize ourselves,” said Intuit Senior Vice President Mark Goines. “We have a very solid relationship with Excite. We’re very excited about their combination with @Home.”

@Home’s pending $7.5-billion takeover of Excite would give Excite shareholders stock in @Home. For that reason, the sales by AOL and now Intuit suggest that those investors believe that @Home stock won’t enjoy the same premium as shares in Excite or other pure Internet stocks.

“Intuit said, ‘This stock is pretty much where it’s going to be,’ ” said analyst Jim Balderston of Zona Research in Redwood City. AOL, which also held a 10% stake in Excite, likewise said it sold for financial rather than strategic reasons.

Excite shares slipped 94 cents to close at $98.81 on Thursday, a price still more than 318% above its level of a year ago. Intuit stock was unchanged at $89.56, @Home fell $2.31 to $103.69 and AOL eased 38 cents to $87.19.

@Home and Excite declined comment.

Intuit said it had already sold 450,000 of its 5.8 million shares in Excite. It paid an average of $2.73 for each split-adjusted share, giving it a profit of about $557 million.

Goines said the company might use the proceeds for acquisitions or other strategic ventures.

Analysts said that if Intuit does end up putting its services on AOL and not @Home’s Excite, the move might signal a trend toward alignment of Web services in one of a few major camps, including AOL-Netscape and @Home-Excite. For now, many Web companies that compete in one area continue to cooperate in others as they seek to share one another’s traffic.

Intuit also reported better earnings than had been expected by Wall Street. The quarter ended Jan. 31 produced net income of $89.9 million, or $1.42 a share, up from $41.8 million, or 85 cents, a year earlier. Without a recent acquisition, the company would have earned $1.34 a share, ahead of the $1.30 consensus estimate.

“This is a growing and profitable software business that also enjoys the growth of the Internet,” said Hambrecht & Quist analyst Genni Combes in San Francisco. The Internet provided about 10% of the quarter’s $346 million in revenue, and Combes said that part of the business should increase at 100% or better, on top of 20% growth in the rest of the company. The company’s online tax service, which began Jan. 20, has had surprisingly strong results: 93,000 returns had been filed by the end of that month. And Quicken.com’s page views jumped to 4.2% of the Internet audience in December, according to Media Metrix, which tracks Internet traffic.

Separately, Intuit said it has sold marketing and advertising worth $60 million in the next two years to Charles Schwab Corp., Datek Online and others.