Phantom Mint Revenue

While we see Intuit’s reported $170 million purchase of Mint as an inexpensive takeout of a future competitor for Intuit, NetBanker argues that it’s a deal that will produce tangible financial returns for Intuit.

Essentially, NetBanker thinks Mint will generate at least $10 million of profits revenue. While I would agree that there is an outside chance that Mint can generate that annual profit (“outside” because $10 million of profits implies at least $30 million of revenue in the best of scenarios), I am less certain about the source of revenue that NetBanker forecasted. NetBanker wrote:

While Mint isn’t likely making that type of profit [$10 million per annum] today, the combination of lower costs from Intuit back-end systems and additional revenues from upselling Intuit services (TurboTax, Cuckoos, and others), should elevate Mint to a $10 million-plus business unit relatively quickly.

I wonder why this will be so. I get the lower costs from Intuit’s back-end systems — I am with Netbanker on this one. It’s the cross-selling revenue that I am less certain of. While I don’t have any data to support it, my understanding is that most of the users on Mint today are not exactly lovers of Intuit’s services. How is Intuit going to take a population of status-quo-hating users of Mint and sell them status-quo products like Quicken that essentially lack what is at Mint’s very essence: community-driven financial services advice and applications?

At the core, I see Intuit having a very difficult time keeping those 1.4 million Mint users in its fold. Internet audiences (yes, that’s you) are a fickle thing. Just look at how MySpace lost its audience to Facebook in relative short order. All Intuit has to do is assign a price for one of Mint’s currently free applications and many Mint users will bolt. To say, that Intuit can then turn a venture like Mint that is in all likelihood generating relatively nominal revenue into such a home run is difficult for me to understand. Rather, Intuit should just hope that it can keep the Mint universe from going AWOL.