Intuit's Acquisition Elevates Online Banking

BOSTON (TheStreet) -- If you can't beat 'em, buy 'em.

That seems to be the lesson from Intuit's(INTU) $170 million purchase of Mint.com, a free online service tracks users' spending and saving patterns. It's the latest case in which a larger company is outfoxed by a smaller rival. Microsoft(MSFT) announced in June that Microsoft Money Plus software would no longer be available for purchase. Two months later, the software giant modified its decision, announcing it will release versions of Money Plus Deluxe and Money Plus Home & Business, which don't allow access to online or premium services.

Intuit's deal, announced Monday, could serve to elevate so-called personal finance management companies looking to build market share and hasten the demise of those that became too big and sluggish to remain cutting edge, which is important given that younger people are comfortable performing banking transactions. Still, Intuit's acquisition means it's "all-in when it comes to personal financial management," says Jacob Jegher, a senior analyst at Celent, a Boston-based financial research and consulting firm.

Microsoft's loss is a gain for smaller firms, such as Wesabe, a free online service that combines financial-planning tools with a community of users offering advice.

"When I started Wesabe in 2005, many people, including Intuit founder Scott Cook, told me no one would ever manage their money online," Chief Executive Officer Marc Hedlund says. "A lot has changed since then. It's great to see how broad and strong the support for online personal finance is today. I think this [Intuit] deal reinforces that."