FOR IMMEDIATE RELEASE                                          AT
THURSDAY, APRIL 27, 1995                           (202) 616-2771
                                               TDD (202) 514-1888


       JUSTICE DEPARTMENT FILES ANTITRUST SUIT TO CHALLENGE
                  MICROSOFT'S PURCHASE OF INTUIT


     WASHINGTON, D.C. -- The $2 billion deal planned by Microsoft
Corp. to buy Intuit Inc., which includes, "Quicken," the leader
in personal finance software, was challenged today by the
Department of Justice when its Antitrust Division filed a suit to
block the merger on the grounds it would likely lead to higher
prices and lessened innovation in that market. 
     Intuit's Quicken is the leading personal finance software
and the Number One selling home personal computer software
product with a 1994 market share of almost 70 percent and more
than 7 million users.  Microsoft's "Money" is the Number Two
personal finance competitor with a 1994 market share of about 22
percent and about 1 million users.  Between them, Intuit and
Microsoft accounted for more than 90 percent of personal finance
software sales in the United States in 1994.
     Personal finance software is used by consumers at home on
personal computers to control their financial records and
transactions.  In 1994, sales in that market reached nearly $90
million.
     "Allowing Microsoft to buy a dominant position in this
highly concentrated market would likely result in higher prices
for consumers who want to buy personal finance software and would
cause those buyers to miss out on the huge benefits from
innovation," said Anne K. Bingaman, Assistant Attorney General in
charge of the Antitrust Division.  "Moreover, Microsoft's control
of that market will give it a cornerstone asset that could be
used with its existing dominant position in operating systems for
personal computers to seize control of the markets of the future,
including PC-based home banking."
     In an attempt to alleviate anticompetitive consequences,
Microsoft said it would transfer part, but not all, of its Money
assets, essentially at a zero purchase price, to Novell Inc., a
software developer headquartered in Provo, Utah.  The complaint
alleges that this partial transfer to Novell would not be enough
to prevent the anticompetitive effects of the Intuit acquisition
since Novell could not be as effective a competitor with Money as
was Microsoft.
     "This so-called fix just won't work.  Novell simply can't
replace Microsoft--with its leading position in the personal
computer software industry--in competing against an entrenched,
dominant product like Intuit's Quicken," said Bingaman.  "Also,
keeping Quicken independent, will allow others to team with
Quicken to compete in the emerging electronic commerce markets,
including home banking."
     The Department filed its civil antitrust complaint in U.S.
District Court in San Francisco.  It would prevent Microsoft,
headquartered in Redmond, Washington, and Intuit, headquartered
in Menlo Park, California, from consummating the proposed deal.
     According to the complaint, both Microsoft and Intuit
recognized their combination would enable them to eliminate the
substantial competition between them in the personal
finance/checkbook software market and the emerging market for
home banking.  The complaint quotes Intuit's chairman, Scott
Cook, as saying to his board of directors that the acquisition
would eliminate "a bloody share war" and allow for "enriched
terms of trade."  The complaint also states that a Microsoft
executive concluded: "As a combination we would be dominant." 
     In its complaint, the Department also stressed that entry
into the personal finance software market is difficult.  If
Microsoft were allowed to buy Intuit's Quicken, a new competitor
would not likely be able to enter the market within a reasonable
amount of time with a product that would be able to compete
effectively in the market, the Department said.
     Two other products, H&R Block Financial's "Managing Your
Money" and Computer Associates' "Simply Money," are also sold in
the personal finance software market.  They represent a total of
less than 10 percent of the market and have almost no competitive
significance, the Department said.
     Personal finance/checkbook software products have a number
of core integrated functions, including: an electronic checkbook
with automated check writing, check register keeping and
household budgeting; personal asset and liability tracking and
reporting, cash and retirement account tracking and personal
financial reporting and statements; and automated bill paying in
conjunction with a bill-paying service.  These core functions are
linked together so the consumer's records and transactions are
all automated and connected.
     Intuit also makes a number of financial and productivity
software products, including, TurboTax and MacInTax tax software
and QuickBooks business accounting software.  Microsoft does not
currently sell software products in these categories.
                               ###
95-241