Intuit Buys Homestead for $170 Million
Remember Homestead? In the dot-com era it offered free ad-supported web sites, and along with competitors GeoCities and Angelfire provided starter sites for many webmasters in training. Homestead has since switched to paid hosting and focused on leveraging its user-friendly web-based sitebuilder tools. Today Homestead was acquired by Intuit (INTU) for $170 million.
Intuit's aim is to use Homestead's software to help its customers build e-commerce stores, a competitive market in which Yahoo Small Business (YHOO) is the market leader and Go Daddy and Network Solutions are growing fast. Intuit has the advantage of a large base of existing small business customers using its Quicken and QuickBooks financial software.
"This acquisition supports our growth strategy in small business by addressing an underserved need, and continues Intuit’s move beyond financial management solutions into helping small businesses solve other important problems," said Brad Smith, senior vice president of Intuit’s small business group. "Homestead helps us solve one of small businesses’ highest priorities – attracting customers – by helping them succeed on the Web."
Homestead CEO Justin Kirch wrote about the deal on his CEO Unplugged blog, noting that Homestead has received 19 takeover offers since its founding in 1997, but remained independent while GeoCities and Angelfire were bought (by Yahoo and Lycos, respectively):
Saying no, even though we've done it a lot of times, is not a simple matter. We have investors who have put millions into our company, and they deserve a rewarding and timely return. We have employees who have spent many years laboring away, and they deserve to sock away some money in their kids' college funds, maybe upgrade from their 1200 square foot million-dollar Silicon Valley house (or buy one at all). We have white boards full of product plans that don't see the light of day because of scarce resources. We have 100's of thousands of business websites that are counting on us being around - and staying the best in the industry -for many years to come.Does being acquired by Intuit work out okay for company founders? You can ask Bob Parsons, who sold Parsons Technology to Intuit for $65 million in 1994. He used some of the cash to build a domain and hosting juggernaut Go Daddy.
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By Rich Miller 
November 26, 2007 | Permalink | >Get Posts By E-mail
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