Here's where Intuit is leveraging its QuickBooks accounting software market leadership. By utilizing the Internet, Intuit can offer QuickBooks customers an easy solution to payroll. So far, Intuit has more online payroll service customers in its first year than competitor Paychex got in its first six years. One of the biggest benefits of this type of business is the float it generates. Of course, online payroll is just one of several e-finance initiatives at Intuit.
Electronic finance is a truly huge opportunity.
Intuit's online mortgage service, Quicken Mortgage, serves a U.S. mortgage market that is 40 times the size of the U.S. book market. Not only is e-finance huge, but it offers a high return on investment. Right now, Intuit is incurring high fixed costs as it builds out its Internet ventures, but at a certain point the fixed costs will be covered and profitability should soar. That's the operating leverage that's inherent in so many Internet businesses. With so much opportunity in the lucrative e-finance market, it's no surprise that competition is intense.