Intuit and Homestead join forces

Big news in the Homestead universe today!  We announced this afternoon that Homestead has entered into a definitive agreement to be acquired by Intuit for a generous amount of cash.  You can read the standard-issue press release here.  It's expected to close early next year.

The backstory is a bit more interesting.

Ever since I started Homestead in 1997, I have kept two lists.  The first list is all the acquisition offers we have received over the years (it's nineteen long, not counting this one).  The second list is a "wish list" that contains companies I would actually consider selling our "baby" to; companies that have resonated with me and the Homestead philosophy of doing business over the span of my career (this list has four members).  Intuit is on the first list twice and, as you might guess, a member of the illustrious second list.

You have to understand that when you start a company in your bedroom because you don't want to work for "the man," it is quite exhilarating (and a bit amusing) the first time another company comes along and offers to pay you a lot of money for what you've created.  I've never intended to sell Homestead, but then again I've never intended not to sell it either.  It just hasn't been a primary focus.  It's much more fun to hire amazing employees, build great products, and delight the pants off of your customers.  In fact, you can ask my wife: getting an acquisition offer is a major distraction and usually knocks my world off of its axis for a few weeks until we eventually say no.

Saying no, even though we've done it a lot of times, is not a simple matter.  We have investors who have put millions into our company, and they deserve a rewarding and timely return.  We have employees who have spent many years laboring away, and they deserve to sock away some money in their kids' college funds, maybe upgrade from their 1200 square foot million-dollar Silicon Valley house (or buy one at all).  We have white boards full of product plans that don't see the light of day because of scarce resources.  We have 100's of thousands of business websites that are counting on us being around--and staying the best in the industry--for many years to come.

I have to weigh all of those factors (and consult with many folks) every time this happens, before I can give a response that I feel is fiducially and ethically responsible.  Nineteen times that calculus has resulted in a "no."  Last week it came out with a resounding "yes."

Here's why.  We don't get our kicks out of delivering financial returns for our shareholders (although it feels good, we think of it more as a responsibility than a thrill).  As I said above, our thrills come from employees, products and customers.  So if we can deliver a great return to our shareholders--while accelerating our dreams for employees, products and customers--an acquisition makes a ton of sense. 

Which brings us back to the second list.  A suitable acquiring company for Homestead has to be a place that we all can feel as strongly about as we do about Homestead.  It has to have a set of core values that matches the Homestead Creed.  It has to have a hiring policy similar to our "no jerks, no idiots" rule.  It has to believe in giving back to the community.  It really helps if we can keep our brand, our offices, our wacky traditions, our identity.  And we absolutely have to keep all of our people, and be able to maintain the sense of ownership and pride that we all feel today.

I'm happy to report that Intuit passed all of these tests with flying colors.  I'm 100% confident the merger between Intuit and Homestead is in the best interest of all 5 Priorities that Homestead's Creed spells out.  To our Shareholders (#5), we'll feel proud that we delivered for them as we bid them a fond farewell and begin serving different financial stakeholders.  To our Community (#4), we'll be announcing several fantastic initiatives in the coming months (stay tuned).  To our Customers (#3), you'll notice no changes (except a new privacy policy and a little "an Intuit company" logo under our name); however, we'll be rolling out more great Products (#2) even faster.  And finally, to our Employees (#1), you'll have to buckle your seat belts once again--this wild ride is only going to get more exciting in the years to come!

Oh, and the blog stays, too.

--jsk

Comments

[Perry Andropolis]

Morning Justin.
Congrats on the merger with Intuit. Great company. I've been a customer for about 3 years and love your company. One big issue a company/service as user friendly as yours - in our opinion you should support Apple computers. With Vista endless problems with Apple exploding PC growth, , the fact you are located near Apple and the fact that we are moving exclusively to Apple we like to encourage you to support Mac with your full version. Anyway have a great day. Regards, Perry and Tracy - Apple lovers.

[Sid]

OK, So I clicked on this blog to hear about the buyout. When will we see the official anouncement on Homesteads Site and when will we find out what will change.

[Erik Lane]

I'm excited...and cautious. Should I hold onto my wallet? The price has been right for over 5 years....

[Todd Donald]

Why did you delete my earlier post Justin?

Are you deleting any posts which are in clear objection to YOUR recent decision?

Isn't it lovely how the small companies we support turn into corporate tyrants who have zero concern for the customers who made them what they are. I do not remeber ever being asked for my opinion on selling to Intuit, despite the fact that I have invested $1000's in Homestead AND recommended to everyone online and off. Now, in your lust for greed, (and your slaveship to stock holders apparently) you have sold Homestead.

And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.
Matthew 19:23-25

CANCEL MY ACCOUNTS ASAP

[Todd Donald]

Looks like someone named Erik Lane (perhaps a moderator) is latching onto my blog comment:

"Why did you delete my earlier post Justin?"

[Colin O]

Oh dear,

I guess it will be us homestead users that loose out again.

Those who have used Homestead for a long time will remember when Homestead annouced that their free service was to go.

We were faced with the choice of reducing our current websites to a couple of pages only, or paying their full-whack fees.

ONLY once the sign-up deadline had passed & many people had been forced to start paying for the all-singing-all-dancing service did homestead choose to announce their light/home user package.

I guess we may be facing many nmore such unpleasant supprises.

[Pooneet Goel]

Great news Justin...Congrats!

[Christine]

I have been a Homestead customer since the beginning. I've received great customer service in the past and I'm sure that will continue in the future. Hoping all goes well in 2008 and looking forward to some new features.

[Eric N faith]

Justin
Is any of "Homesteads" customer service going to be outsourced to India ...Like Intuit's?

Your faithful customer...Eric

[Donny Walters]

WOW! Should have held onto my money a little longer. I JUST paid for the entire year and now I am skeptical of the outcome of this news. I know someone with power at Homestead is going to read this. Therefore, I want you know that I have spent hundreds of hours on our website and others. Please tell me if there is a way to back up my websites.

Erik,
Judge lest you not be judged. Your post was out of context Bro.

"And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God."
Matthew 19:23-25

[Jennifer]

Well Ive only been with Homestead for 2 months and the fact that they are selling out leaves a bad taste in my mouth.
Im out as soon as I can find a site to transfer to without any interruptions.
I refuse to call customer service and get someone from another world that can hardly understand me and I, them. Im not an intuit fan....and no longer a Homestead fan. Prices will go up, customer service will be lacking, etc etc. NO THANK YOU!

[David]

I'm really impressed by your 11-26-07 blog entry. I'm an investor, businessman, and customer of Homestead. Your philosophy and patient discipline in executing it really impressed me!

Good luck.

[MarkAlan]

I have been with your from the start.
You have a great product and great service.

Regards,

[Justin]

Folks,
Thanks for all of the great emails and comments. Please don't worry about prices going up--that is not in the plans. For the few of you who seem to be taking the news a bit hard, please rest assured that myself and our fantastic team will still be in full control of the day-to-day Homestead experience.

And Todd, I'll leave your last two comments, but please try to follow the "rules of the road" that I ask all commenters to follow: feel free to share your opinions as long as it is on topic and respectful of me and your fellow commenters.
--jsk

[darlene]

congrats! please! Just don't change the tech support team. I am so happy that i can understand them!
thanks

[Jessica]

Guess you got sick of running Homestead, and want a way out huh? I know how you feel, disappointed that it's getting harder and harder to take Homestead to the next step, and you want to just take the cash and leave.

I really believed in you, Homestead and your support for the user, but now I don't know what to think now. Selling out...to Intuit?!?!?! I can't believe out of all the companies in the Silicon Valley, you chose...Intuit.

But hey, whatever, congrats on your big pile of cash.

Disappointed.

[Keith MacAllister]

Hi
I've been with homestead from the start.When it was free. You guys have always given us a break on price and other perks.(free .com name, ect"
I hope it stays this way I don't want to start over somewhere else.

and Congrats on the sale.

[Shinmew]

Ummm... I got quite upset when I saw the email. I have this feeling that the price will go up in the future and/or I might lose features that I've grown to love. I'm glad things are working out for you by this, but will it have a negative effect on the rest of us in the future? All I can do is cross my fingers and hope not. It hurt me enough when you started charging people and the price slowly went up each year. Then I got the upgrade account for no change of price due to being with you for so long. I hope this new company does not get a wild itch to raise my price. I'd hate to have to downgrade or leave. They BETTER take good care of us.

[Joshua]

Thank you for reading our comments and for enteracting with us. It shows that you are concerned for us. To repeat what I said befor, keep your same services and your price under $30 and you will always have me with you.

[David Halland]

Congrats to Homestead!
As yet another former employee I have to say that I am very impressed. I am convinced that Justin will only lead the company and its employees to more success. I was fortunate enough to be Homestead's 2006 Salesperson of the Year and know firsthand how committed Justin is. Good luck to all my friends at the company.

David Halland

[hugh]

Who are you people to tell someone what they can do with their company? Does Justin get to tell you how to run your personal business. Secondly the people who got upset when it was free, what do you do for FREE? YOU WORK FOR FREE ?
I have been with Homestead from the beginning Congrats Justin. I understand not wanting things to change but being upset at someone doing something with their own property and or asset is just unbelievable. WOW

[Donny Walters]

Also, I recenlty made a call to upgrade some things and was told that I could have x number of e-mail accounts, two more domains, and space added for FREE. I questioned the gentleman several times, he assured me that since I called in he was able to do these things. Well the next thing I know my card had been billed about $40 more than what I expected. When I called about it, I was told that it was because of ALL the upgrades. I did not expect to get something for nothing, that is just what I was told when I called.

Now I know how hard Homestead tries to work with its customers, but what is to be expected with someone that may not even be able to speak english...nightmares.

Back to my original question. Can someone in Tech support or otherwise please tell me how to save the changesd to my websites just in case something goes south with this deal?

[Todd Donald]

Justin, Thanks for leaving my last post in. I have not taken the time to study your blog's rules and obviously this news hit me hard. Your decision is between you and your creator. Obviously whenever a company sells it spells T-R-O-U-B-L-E rgardless of how good a sales pitch or PR spin is put on it.

I am a firm believer in loyalty above all else and your news of selling broke my heart and just added one more nail in the coffin for humanity in general. I have stood by Homestead all these years because I knew that you were a mid-sized company strong enough to maintain your position and protect my assets.

Although Intuit is a great name for marketing hype and will certainly make stockholders giddy, personally I hate Intuit because I have been on the receiving end as a customer. Their software is hokey at best and their customer service is so bad, it makes Homestead's CSR Team look like they were schooled by Mother Theresa. Intuit's products are over priced, under engineered and they have zero customer support. In so far as takeovers, mergers and acquistions go, everybody knows that no matter how well intentioned a good buy-out may begin, once they figure out they have extra office space, or too many Dottie's they scale back. Sometimes this happens in days, other times it takes weeks or months, but it is absolutely guaranteed to happen just as soon a stheir bean counters get involved in the day to day budgeting. My advice to you, is be honest with your employees, because they can make or break your future endeavors. It is often said that the best leaders bring their team with them.

The customer base will also change. Those who like "Brand Names" will buy in.. People like me, who appreciate good service at a fair price and therefore are opposed to big business (because it offers the opposite) will leave, (I've already dropped over two dozen domains and am in the process of moving sites out).

It's sad that corporations even exist really... All they do is suck investors out of money with promises of big returns, which produces a new company which is behind the eight ball and a slave to profits and dividends. Whenever the bottom line is most promising, or least promising big changes occur. I saw it happen to mine and my wife's employer's including Platinum Technology, divine inc., Lockformer, Motorola, etc. Anyone seen the Cobert Report where he jokes about AT&T?...

Well, Anyway - Sorry for condemning you just for giving into temptation. It's hard to resist money and the pleasant thought of saying bye bye to creditors. Your creation of Homestead was a pleasure for many, myself included. I have enjoyed your offerings over the past 1/2 decade. Times change... You need to pay the piper and I need to find a new worthy host.

Will you be offering any dividends to the real investors (existing customers) who fed Homestead $ and molded you into something worth selling?

[Michael Geller]

A heart-felt CONGRATULATIONS goes out to JSK and the entire Homestead team! Very well done. One for the good guys. What would David Coursey say now? :o)

MG

[Eric Nebbia]

Cool. Congrats! Glad to see that things worked out and you're going to be part of a great company.