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Intuit vs. Web 2.0: Entry-level QuickBooks software is now free

Why is Intuit giving QuickBooks Simple Start away for nothing?

Intuit is making the 2008 version of its entry-level small-business accounting product, QuickBooks Simple Start Edition, free. Previous full versions of the program sold for $99.95, and "more than 300,000 businesses" use the product. So why give it away?

Intuit's pitch is that it wants to encourage entrepreneurs to take the plunge and launch their dream businesses, and removing the $100 barrier to basic accounting software is its way of proving it. Alongside the launch of the 2008 version, there's a new "Just Start" marketing campaign and contest, in which one person can win $50,000 in cash and services to start a business.

Whether or not Simple Start is good software (I haven't used it and have no opinion), Intuit's move to make it free is defensive. Microsoft offers a competing stripped-down small-business accounting product, and there are new small business-focused Web 2.0 services coming online all the time. Most of the free and low-cost business apps are fairly basic, and that's all mom-and-pop startups need. What the accounting vendors really want is the more grown-up small business customers that are willing to pay for robust accounting solutions.

Hence Intuit's entry-level software that is free today, but that works as an easy gateway to paid services like Payroll ($99 a year and up) and to its more powerful QuickBooks software and online products. It's a straightforward get-them-while-they're-young strategy. Or rather, get them while the Web 2.0 is still young.