Yesterday, Intuit closed on its previously announced $170 million acquisition of personal budgeting site Mint, making Mint founder and CEO Aaron Patzer the new vice president and general manager of Intuit’s Personal Finance Group. He is now in charge of not only Mint.com, but also all of Quicken’s online and desktop products. What will his first order of business be? I spoke to him today to find out.

“Over the next 6 to 9 months,” he says, “we will end-of-life Quicken Online and their customer’s data will be migrated over to Mint.” Just a few months ago, the Quicken Online team was questioning Mint’s success. Now, Patzer is their new boss.

It’s not so much revenge as it is a smart business move. Intuit doesn’t need two different online financial planning sites for consumers, and it bought Mint because it couldn’t beat it. Combining the two is the obvious move. (Both help consumers keep track of their money and spending by monitoring their bank accounts, brokerage accounts, credit cards, and other financial accounts).

Quicken Online has roughly 1.5 million registered users, but only about 100,000 are active in any given month. In contrast, Mint has about the same number of registered users (1.7 million), but nearly 700,000 are active every 30 days. “The biggest opportunity for us is to reactivate those users who thought that maybe Quicken Online wasn’t for them,” says Patzer. (Read his account of how he built Mint over the past two years after winning TechCrunch40).

Other than Quicken Online’s users, is there anything that he’d like to keep? Patzer can only think of one feature Quicken Online has that Mint doesn’t and which he wants: the ability to manually enter cash transactions or record checks which have not yet cleared.

The fact that Intuit put him in charge of Quicken’s desktop products as well as its online services says a lot about where it thinks the future of that business is going. The growth is definitely in the online portion of the business. And now Intuit can start cross-selling Mint from its Quicken desktop products, as well as TurboTax. Some consumers, however, will always prefer the perceived security of a desktop app when it comes to their personal finances, which is why Patzer is starting to think about ways to store some information from Mint locally by using something like Google Gears, Adobe Air, or Microsoft Silverlight.

Building hooks into TurboTax will present other opportunities beyond simply signing up new members. When a TurboTax user decides to sign up for an IRA to save on taxes or want to know what to do with their tax return, Mint can present the best rates and offers from competing financial institutions and earn a hefty fee for finding one of them a new customer.

Patzer has other ideas for connecting Mint and TurboTax as well: “What I want to do is to take your stock transactions and everything you’ve tagged in Mint as a medical expense or business expense and push that over to see if you should itemize deductions. If we pull in your 1099s and deductions, we have done half your taxes for you. We could reduce the time it takes you to do your taxes to 20 minutes or less.”

The next step after that would be to get into financial planning for big life goals such as paying down debt, saving for college, buying a house or car, or saving for a home renovation or a big vacation. He wants Mint to be at the center of every major financial decision a person makes.

When he sold to Intuit, he took some flak for not going it alone, but Patzer believes he made the right choice because he can build a bigger business much faster at Intuit. He wants to keep pushing online, as well as mobile, desktop apps, and international (which is hard to do in finance with a 38-person startup). Mint already has a popular iPhone app which has been downloaded more than 350,000 times, and is now working on an Android app.

But the biggest reason Patzer sold is because Intuit will help Mint get to scale faster. Mint’s value is in the personal financial data that it tracks, and that data will be much more valuable with 5 million active users than with under one million. Getting to 5 million and 10 million and beyond is the game. And however popular Mint was among younger, Web-savvy consumers, some people were never going to trust it with their financial lives. About 25 million people a year already trust Intuit with their taxes, half of those online. That’s the most sensitive financial data a person has to give. If you already trust Intuit with your taxes, making the jump to Mint becomes a lot easier for those who might have been hesitating before.

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Mint, which sold to Intuit earlier this week for $170 million, is Yodlee’s YouTube. That’s because, like YouTube, the core technology behind Mint wasn’t developed in house. It was licensed from Yodlee, who got paid very little for what they provided.

Yodlee, which has raised at least $116 million over its 10-year lifespan (a lot of that was written off in a recapitalization), is the leading provider to account aggregation for banks. If you log into your bank’s website and they offer you the ability to aggregate accounts from other banks and financial institutions, it’s likely Yodlee is powering it.

Very early in Mint’s life they signed a sweet deal with Yodlee to provide all that back end technology. Mint focused on the front end user experience, and did a great job with marketing. People who have knowledge of the deal say total payments from Mint to Yodlee over the last couple of years are around $2 million/year. So Yodlee made $4ish million off of Mint.

And Yodlee never thought to ask for equity in Mint in the early days of the company, so they didn’t make anything from the acquisition.

To make things worse, Mint gave a “substantial” amount of Series A stock to Hite Capital in exchange for the Mint.com domain name. That stock was worth a “couple of million dollars,” says one source, after the acquisition.

The final insult: Yodlee won’t even be able to collect those small fees any longer from Mint. Intuit has it’s own back-end account aggregation service that it will use instead of Yodlee.

To be fair to Yodlee, the situation isn’t quite identical to Adobe/YouTube. The specifications, called OFX, for transferring account information between financial institutions was created in the 1990’s and any company is free to build on them. There are a few competitors to Yodlee, but for the most part they dominate the market.

But what Yodlee didn’t forsee is that sometimes having an enterprise approach isn’t the best. Mint focused on design and user experience and sold for $170 million two years after launching. Yodlee, after a ten-year fight and more $116 million or more in venture capital, is still looking for an exit.

And don’t just call this luck. Mint founder Aaron Patzer has nerves of steel and knows how to leverage risk. The rumor is he turned down an offer from Intuit earlier this year for $130 million. I’m not sure many entrepreneurs would have been able to do that. But the bet paid off, and he and his investors made another $40 million.

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Update: CEO Aaron Patzer has just confirmed the deal on-stage at TechCrunch50, and written a guest post describing The Value of TechCrunch50 that contains more details.

This is a terrific exit for Mint, which first launched two years ago at TechCrunch50. Mint took the top prize at that event and has been growing fast ever since. Their last round of financing valued the company at $140 million.

In all, Mint has raised $32 million over three venture rounds.

Earlier this year Mint and Intuit had a humorous clash over Mint advertising claims of gaining 3,000 new users a day and jumping from 600,000 to 850,000 users in a matter of months. Intuit sent a letter to Mint demanding an explanation for this apparently inconceivable feat, which we obtained and printed here.

We have just one question for founder and CEO Aaron Patzer, though. Can we please have our $50,000 grand prize back? It seems like you don’t really need it any more.

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Personal finance tracking site Mint.com added a bunch of new budgeting and trending features today. Mint presents consumers with a financial dashboard based on spending and income data from their bank, credit card, and other financial accounts. It expanded its charts to include spending over time, income history, asset allocation, and net worth over time.

You can now plan for irregular expenses such as property taxes, auto insurance, or vacations. Budgeted items can be rolled over into the next month if they haven’t been used up, and Mint now figures out your income based on your paycheck. It takes all of this data and projects your savings or shortfall over time.

All of these new features will be appreciated by Mint’s 1.4 million registered (and 550,000 active) users, but they also point to a new direction for the site: bookkeeping for small businesses. Mint now has pretty robust reporting for personal expenses, income, and savings. These same tools could very easily be tweaked to help small businesses track costs, revenues, and profits.

All Mint needs to do is change the names of the categories, and add an invoicing feature to go after basic accounting sites like FreshBooks or Outright, which are in turn going after Intuit’s more fully-featured QuickBooks.

For entrepreneurs with limited time on their hands, the ability to track both personal and business finances in one place would have obvious appeal.

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Intuit, the company that makes personal and small business software, has launched a new capability called “Federated Applications” that allows SaaS developers to write their applications using any programming language and cloud platform and connect them to the Intuit Partner Platform. Intuit’s Partner Platform provides a foundation for developers to build and deploy apps that can be integrated with Intuit’s small business accounting software, QuickBooks. QuickBooks has close to 25 million users within 4 million businesses who can buy these apps on Intuit’s own version of its Salesforce.com-like App Store, Intuit Marketplace.

The “Federated Applications” functionality lets developers who have existing SaaS applications that are built with any programming language, database or cloud computing platform publish their apps on Intuit Marketplace. Applications won’t have to be rewritten to conform to QuickBooks but will instead go through a minor configuration process.

Last year, Intuit opened up the API to its management software, QuickBase, to developers who wanted to build web applications and businesses on top of the product, in an effort to enter a space already occupied by Salesforce.com, Google, and Amazon. This recent news seems like another strategic move for Intuit to open up its app marketplace in order to gain a greater variety of apps from different developers. Previously, developers were limited to developing an app for QuickBooks directly on Intuit’s Partner Platform and then could only market that app solely on Intuit Workplace. Now, app developers who have SaaS offerings on other CRMs or software products can tap into the QuickBooks community, and vice versa.

For example, Vertical Response, which creates an e-mail marketing, online survey and direct mail application, sells its app on the Salesforce.com AppExchange and will now sell its app on Intuit Workplace. The VerticalResponse app that sells on Intuit Workplace adds sales and marketing tools to the accounting functionality of QuickBooks.

Other “Federated Apps” on Intuit Workplace include Dimdim, a web conferencing tool; Rypple, a collaborative app; Setster, which assists with scheduling; and ExpenseWare, a travel and expense reporting application.

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Intuit, the company behind the well-known Quicken suite of money management software that includes Quicken Online, can’t believe how well its competitor Mint is doing. In fact, they were so bewildered by Mint’s claims of gaining 3,000 new users a day and jumping from 600,000 to 850,000 users in a matter of months that they decided to send a threatening letter demanding an explanation for this apparently inconceivable feat.

We’ve obtained copies of both Intuit’s letter and Mint’s reply, which we’ve embedded below. From Intuit’s letter:

“While we do not wish to suggest that Mint.com is engaging in false advertising, the substantial difference in claimed user numbers over a short period time [from 600,000 to 800,000] is of some concern. As a result, we’re requesting that you provide us with the Substantiation and evidence that you rely upon to support the above reference claims… before February 6, 2009.”

Note that the letter says that Intuit doesn’t “wish to suggest that Mint is engaging in false advertising”, despite the fact that that was the entire purpose of the letter. Nice.

Aside from Mint’s remarkable growth rate, Intuit’s concerns focus on the startup’s definition of “users”. Mint’s reply states that the company considers anyone who has filled in an Email address, Zip code, and password to be a “user”, regardless of whether they’ve ever actually linked their bank account to their Mint user name. This figure obviously overstates the number of people who actually use Mint on a day-to-day basis, but it’s also a fairly standard way to define “users” for most web services. As an outside check, Comscore counts 416,000 monthly unique visitors worldwide, and growing rapidly (see chart below).

That said, Mint’s definition of “user” raised some concerns for me – I suspected that after entering their Email information and getting counted as a new member, many of them would jump ship when they realized they’d need to enter their bank account information. But CEO Aaron Patzer says that as of today around 680,000 of 934,000 registered users (over 70%) have linked at least one bank account to Mint, with most of them linking between 5-6 of their financial accounts. Frankly this number is far higher than I was expecting, and indicates that most people visit Mint with the full intention of entering their account information. Patzer also notes that while those users who haven’t linked their bank accounts to Mint will have access to less functionality, they still receive regular offers from Mint’s partners.

Could Mint have been more transparent with its user numbers? Probably, but their methodology for measuring user stats is par for the course here – certainly nothing worthy of Quicken’s demanding letter. The bottom line here is that Mint is growing so quickly (it will soon pass one million users—no doubt spurred by the bad economy and tax season), that its competitors literally can’t believe it. And for any startup, that’s not such a bad thing.

Update: Intuit spokesman Scott Gulbransen has offered the following response to this story:

We’d like to apologize to Mint.com if our letter came across as anything but a simple request to understand how they count their users. Businesses do this all the time and we appreciate their reply.

We are so pleased with the rapid growth of Quicken Online, we were just curious about how we’re doing. And now that we have a common yardstick by which to measure, we know we’re doing great based on an apples-to-apples comparison. Quicken Online now has more than 650,000 users and has been adding on average approximately 45,000 new users a week since Jan. 2009.

So now you know…customers are choosing Quicken Online more than ever before.

Thanks,
Scott

Here are the two letters:

mintpdf1 – Free Legal Forms

mintpdf2 – Free Legal Forms

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Trackvia provides software as a service for transforming ordinary spreadsheets into versatile databases. The Colorado-based startup has raised its first major round of institutional funding, the amount of which (while not disclosed) is being described as a “typical Series A”.

The round’s investors include two VCs out of the Rockies – Flywheel Ventures and Access Venture Partners – plus some notable angels, including Tim Draper of Draper Fisher Jurvetson. Prior to this Series A, Trackvia had raised less than $1 million since launching in February 2006.

Trackvia appeals to SMBs that need to organize, access, and analyze business critical data that might typically be placed into Excel or Access files. By importing these files into Trackvia, the data can be searched and queried as with traditional relational databases. It can also be used to generate statistics, print out mailing labels, run email campaigns, create custom views, and generate web forms (think Wufoo). Images and other files can be loaded and associated with entries, and the system retains a comprehensive change history for all entries. Permissions can also be set on a per-entry basis.

Trackvia competes with Blist (review) and DabbleDB (review), although its customers don’t tend to bring these companies up; they’re more likely to mention Intuit’s QuickBase and Act. Trackvia’s executives suggest that its customers are not so much interested in sharing their data broadly but are rather looking for better ways to handle information internally.

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Intuit is joining a crowded field. Salesforce.com has its AppExchange and Force.com. Amazon has its Web services, including SimpleDB. Google just launched its App Engine. And startups like Coghead are also angling for position.

But Intuit already has a lot of small business customers that, in turn, can help it attract developers to its new platform. Bill Lucchini, the general manager of Quickbase tells me:

It is great to have a cool piece of technology, but we have to make sure that developers build successful businesses. Giving them the tools to get in front of our customers is strategy No. 1

He realizes that decent technology is just table stakes. Developers will get access to QuickBase via APIs to use as a foundation for their apps, and they also get hooks into QuickBooks, Intuit’s accounting software that is used by nearly 25 million individuals in 3.6 million businesses in the U.S. alone. Developers will be able to build apps using Adobe Flex and the open-source Eclipse development environment. For the technically-minded, here is a screencast that goes into more details.

Although the economics have yet to be fully worked out, Intuit plans to charge using a utility model similar to Amazon’s that goes up the mnore resources a developer’s app consumes. Says Lucchini:

We are trying to price these things where developers can charge $10 to $20 per user per month and make a profit. Small businesses are pretty price sensitive.

The Web platform wars are in full swing. Which platform will developers flock to for enterprise apps?

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Menlo Park base Homestead launched in 1998 as a free web site host targeted at small businesses that competed with the then wildly popular Geocities.

Intuit, best known as the creators of the Quicken financial software package said that the acquisition would allow the company to offer web site creation and ecommerce solutions to small businesses. Intuit has a checkered history online, with its business directory site Zipingo closing in August. Intuit currently has a partnership with Google that sees Google services embedded in Intuit products.

The deal is expected to be completed in the first quarter of 2008.

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There is a conference call at 1:15 with Intuit President and CEO, Steve Bennett and Google CEO, Eric Schmidt that we’ll be on, which will have more details and at least some hints on the economics of the deal.

The Google services will be built into QuickBooks 2007, available this Fall, for U.S. customers only.

I sure hope there’s an easy way to turn this stuff off.

Update: Notes from Analyst call:

Eric Schmidt is talking about embracing the long tail of small businesses on the conference call. Less than half of Quickbooks businesses have an online presence. This will help them get online, he says. Businesses will be able to create an adwords account using pre-filled information from Quickbooks. If the business doesn’t have a website Google will create a notecard page for them. All businesses will be given a $50 credit to start. Google will also create a business listing for businesses for search on Google.com and Google Maps.

Financial terms: In response to a question on the financial terms, someone said “We have some shared revenue and cost things”. Basically a non answer, although it’s clear Google is making payments to Intuit pursuant to this deal. They also say they are working on things with Google to expand partnership beyond QuickBooks base.

Google will create a web page for businesses that don’t have one, since CPC advertising requires something to click to…So google will be charging these businesses to send them to a page served by Google. I wonder if those pages will have Google ads on them.

Google and Intuit are looking at integrating this into Quicken as well.

Additional Update: Press Release is here. Added a screenshot below.