The two dozen online competitors of Intuit's Quicken can breathe a sigh of relief today. The 800-lb guerilla has done them a favor, levying a monthly fee for its new online-only option, Quicken Online (press release here). While the $2.99/mo fee, after a free month, is reasonable, it's much different than FREE. Look for the websites of the competition to trumpet the $35.88 annual savings very soon.  

Intuit could easily have offered its online option free of charge. While that would cannibalize its packaged version, the overall impact to its bottom line would have been insignificant (note 2). And a free Quicken would have made it much harder for Mint, Wesabe, Geezeo, Buxfer and others to gain a footing (note 1).

My guess is that Intuit doesn't feel too threatened by the startups, yet. The security issue is extremely difficult for a new company to overcome. Intuit is one of the few tech companies with a brand that has trust levels on par with a financial institution. Millions already entrust their entire tax return, which has far more personal info than an online bank account, with the company. 

Intuit will allow the startups to build a following, then acquire the promising ones and convert their users to Quicken Online. All for less than the cash it would have foregone by offering Quicken Online free.  

We'll compare and contrast Quicken Online with the startups in an upcoming Online Banking Report (previous reports here and here).

Notes:

1. A few hours before Quicken Online went live, Mint issued a press release trumpeting its 100,000 registered users. That's an impressive number for a company that went live in September (previous coverage here). However, assuming 20% to 25% of those are active, there are still more than 500 times as many Quicken desktop users. 

2. Intuit's fiscal 2007 pre-tax profit was $670 million.