
Intuit to buy Credit Karma for $7B - totaldude87
https://www.wsj.com/articles/intuit-near-deal-to-buy-credit-karma-for-7-billion-11582433880
======
excerionsforte
My first reaction is NOOOOOOOO.

I first used Credit Karma in college, which made me aware of my credit score.
Credit Karma had a credit simulator at that time, which I would play around
with to see what was the best course of action to get my score up up in a very
short amount of time. I got to where I want and will maintain it.

Credit Karma's tax solution is the best I have ever used for my case! I still
use Mint, but it is in maintenance mode. I can only hope that the CK's tax
solution stays intact in not a transition to TurboTax.

The for-profit tax companies already screwed up with the IRS revamping the
agreement, so as to compete with them:
[https://www.propublica.org/article/turbotax-is-still-
trickin...](https://www.propublica.org/article/turbotax-is-still-tricking-
customers-with-tax-prep-ads-that-misuse-the-word-free). I hope the government
will take good advantage of this opportunity.

~~~
scarface74
I use Credit Karma but the “Fako Credit Score” has little to do with the
credit score lenders use.

~~~
excerionsforte
Well one landlord asked for a printout of the Credit Report and Credit Karma
was cited as one source of report. :) Credit Score is applicable to many
places.

Their Credit Alerts feature did alert my to fraudulent activity almost
immediately At this point if CK had offered a subscription side, I would have
bought in.

~~~
scarface74
They were being cheap. I was a landlord at one point. It’s about $30 to use a
tenant screening service and you charge that as an “application fee”.

~~~
rl3
With most screening services, the tenant takes a hit to their credit score in
the form of a hard pull.

I just pulled my actual credit reports from all three bureaus and my landlord
was satisfied.

[https://en.wikipedia.org/wiki/AnnualCreditReport.com](https://en.wikipedia.org/wiki/AnnualCreditReport.com)

~~~
scarface74
A credit pull for screening is considered different than one for credit. At
most it’s like 3-5 points and the effects disappear fast.

But a tenant screening also looks for evictions (a civil case), criminal cases
and whether you are on the sex offender list.

~~~
intpx
I had 5 screening pulls this year because of all the things involving an
interstate move and changing jobs with different layers of background checks.
In the process of getting financing for a house and I had to provide
explanation and documentation that i wasn't hiding debt for each of them. It
may not affect your various 'scores' but its still a pain in the ass.

------
rayhendricks
Intuit and TurboTax are responsible for needlessly wasting Americans time by
making us reenter our tax information.
[https://www.google.com/amp/s/amp.theatlantic.com/amp/article...](https://www.google.com/amp/s/amp.theatlantic.com/amp/article/316967/)
so yeah it’s pretty awful.

Kredit Karma tax filing software is actually really good though, so I do not
see a reason for them to keep it around though.

~~~
leetcrew
I don't find the credit karma tax UX to be quite as good as TurboTax, although
I very happily used it this year because it's free. I suspect Intuit will not
maintain a free alternative to one of their main products :/

------
brm
Three people start a credit website because they want free access to their
information. 11 years later they sell it to a company who actively tries to
squash free access. Is there a German word for companies that grow and then
exit this way?

~~~
joncrane
No, but there's an American one:

"You either die a hero, or live to become the villain."

~~~
adtac
Isn't that from Christopher Nolan? I guess that makes it a British saying haha

~~~
big_chungus
Batman is apparently heavily inspired by the philosophy of Nietzche. The quote
is probably a more polished version of this one from Beyond Good and Evil: "He
who fights monsters should see to it that he himself does not become a
monster. And if you gaze for long into an abyss, the abyss gazes also into
you."

So maybe somewhat German after all.

Source: [https://movies.stackexchange.com/questions/10572/is-this-
quo...](https://movies.stackexchange.com/questions/10572/is-this-quote-
originally-from-the-dark-knight)

------
Ozzie_osman
It's exactly these types of deals that regulators should look at if they want
to prevent more monopolies in tech. You have what amounts to an entrenched
business maintained by millions of lobbying dollars [1], buying a younger
player offering the same service for free.

[1] [https://www.propublica.org/article/inside-
turbotax-20-year-f...](https://www.propublica.org/article/inside-
turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free)

~~~
scarface74
What do you think would happen to the startup culture if the government made
it harder for a company to be acquired?

~~~
sitkack
Did you pitch for a t-ball team, because thanks for that sweet setup!

We would have more sound business plans and ideas. Startup culture would be
more about creating entities that can exist on their own (adults) vs a danger
to be let loose into an existing market. The later is a shakedown, but lets
not conflate the shakedown with our own goals of seeing outmoded businesses
getting replaced.

If we had free standing startups that can function on their own, they have the
ability to replace existing players by being able to function long term and
respond to changes.

If we create startups that are then sold to the incumbents, we perpetuate
their hegemony. These large corporations are effectively buying organs to stay
alive.

~~~
scarface74
Off topic:

I love this intro:

 _Did you pitch for a t-ball team, because thanks for that sweet setup!_

On topic:

Some businesses require so much funding up front that it’s not feasible. As
always, there is a great blog post by Joel.

[https://www.joelonsoftware.com/2000/05/12/strategy-
letter-i-...](https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-ben-
and-jerrys-vs-amazon/)

And I wish I could take credit for thinking about the consequences of making
it harder for companies to be acquired, but I got the idea from Ben Thompson’s
(Of Stratechery fame) Exponent podcast.

(This link will take you to a website at the time stamp of the podcast if you
don’t have Overcast installed)

[https://overcast.fm/+BihkIZ9fA/31:05](https://overcast.fm/+BihkIZ9fA/31:05)

~~~
BlueTemplar
Well, this part didn't age well :

> Another extremely strong network effect is proprietary chat systems like ICQ
> or AOL Instant Messenger. If you want to chat with people, you have to go
> where they are, and ICQ and AOL have the most people by far. Chances are,
> your friends are using one of those services, not one of the smaller ones
> like MSN Instant Messenger. With all of Microsoft’s muscle, money, and
> marketing skill, they are just not going to be able to break into auctions
> or instant messaging, because the network effects there are so strong.

~~~
scarface74
Doesn’t that kind of argue the point though that you don’t need government to
interfere with tech to avoid monopolies and anticompetitive behavior? The
market took care of that.

~~~
BlueTemplar
ICQ and AOL basically died. While Microsoft bought Skype and basically morphed
it into new-MSN. So Microsoft's slow growth, long-term strategy succeeded,
while it shouldn't have (?).

~~~
leetcrew
I don't think this is really a counterexample. skype was already a widely used
product when microsoft bought it. joel isn't arguing that you can't have
enough money to just buy a product that already has a large network of users.
also (iirc), skype only took market share from aol in the first place because
it had a killer feature aol lacked: video chat. network effects mean you can't
be replaced by a similar service, not that you can't be disrupted by a new
product with a unique feature that people actually want.

------
ajaimk
How does this deal not violate Anti-trust law? The FTC should block this deal
as it is not going to be good for consumers.

~~~
toomuchtodo
I’ve filed a complaint with the FTC regarding this today, consider doing so as
well. I plan to also contact my Congressional reps tomorrow about it.

[https://www.ftc.gov/faq/consumer-protection/submit-
consumer-...](https://www.ftc.gov/faq/consumer-protection/submit-consumer-
complaint-ftc)

------
dangus
100% this is to squash Credit Karma’s free tax product.

This whole for-profit tax software market needs to be killed.

~~~
jetrink
If Intuit's strategy is to spend billions to kill free tax products, then that
would suggest that there's a huge reward for the next organization that can
replicate Credit Karma's success. Is it really that difficult to build tax
software?

~~~
colejohnson66
It depends. There’s 1 federal return (albeit with many different forms) and 50
states (each with their own system). TurboTax, H&R Block, and CreditKarma keep
track of all the changes for you.

And if you make a mistake in your software and the user gets audited, you can
bet you’ll be sued by the user eventually.

~~~
selectodude
And all of the documents that you need are free online. I can’t imagine
there’s much more to it than a time investment.

~~~
manquer
It is recurring investment though, every year tax codes keep changing, you
need to keep it all updated . That’s an enormous cost and relatively unique to
this kind of application.

~~~
toomuchtodo
I suppose the solution is to just keep donating to and enabling candidates
running for federal office who support providing the IRS with the legislation
and technology support to do their job (streamline tax processing) and break
Intuit’s pseudo monopoly.

On the plus side, it’s a lot harder to buy someone with morals than a VC
backed startup.

------
mrosett
Well shit. They’re going to give it the Mint treatment, starting with the free
tax software. I can’t blame the founders for selling out but this one stings.

~~~
alharith
Credit Karma recently opened a decent sized office in my city and is
continuing to expand. There are still 26+ engineering roles posted. I visit
the office frequently and know a lot of the director levels and up working
there. They aren't going anywhere or stopping anything they are doing.

------
edcastano
Let's hope this isn't a replay of the Mint acquisition. Purchased and left to
stagnate for a decade.

~~~
vinhboy
Why does everyone keep saying this. Mint has gotten more reliable over the
years.

They even recently started rolling out direct integration with many big banks.

I still remember the days when they couldn't download data from places like
Chase for months at a time.

~~~
echelon
Don't they still have pieces of their website that rely on Adobe Flash? I
haven't personally used them in years, but I distinctly recall reading this on
a very recent criticism of their service. If that's true, then that's a sure
sign of stagnation.

~~~
miked85
The investments section was flash up until very recently, I think they just
got rid of flash and updated that section in the last few weeks.

------
vsskanth
What's the biggest blocker to making an OSS GPL tax prep software for the US
market ?

~~~
jedberg
The tax code is very complex. It takes a legion of programmers (most of whom
also have tax accounting and/or tax law training) just to translate the tax
code into computer code.

You're unlikely to find enough volunteers to maintain that.

Also, TurboTax is an entity you can sue if they get it wrong and you get
audited because of the error. An OSS project would be a magic black box.

I wouldn't use an OSS tax prep software because I have no way of knowing if
it's correct, nor is there anyone to take responsibility if it isn't.

~~~
selimthegrim
Apparently the IRS was almost done finishing the mainframe to Java conversion
of one of their modules and the programmer’s (a PRC national) contract which
his visa was tied to expired

~~~
iudqnolq
That sounds fascinating. Do you have a link or some more specific keywords I
could search? I would like to learn more about that.

~~~
bobbiechen
Looks like this is the story [1], though it seems the reason is actually some
kind of funding-related issue:

 _Wang was working under streamlined critical pay authority the agency has had
since its landmark 1998 restructuring. It gave the IRS 40 slots under which it
could pay temporary, full-time employees higher than GS rates. Former
Commissioner John Koskinen pointed out Congress did not re-up this authority
in 2013, despite his entreaties to former Congressman Jason Chaffetz’s
Committee on Oversight and Government Reform.

“The last one ran out this past summer,” Koskinen said. The departures
included Wang. He says he applied to become a GS-15 or Senior Executive
Service member so he could see through the assembler-to-Java project. But his
approval didn’t come through until a week before his employment authority
expired. By then he’d accepted another job. Wang says he had a house to pay
for, kids to educate. Koskinen confirms the agency wanted to convert Wang. But
the process of approval from Treasury headquarters and the Office of Personnel
Management simply took too long._

And here's a follow-up from this year [2] which also describes the patent that
came out of that work [3].

[1] [https://federalnewsnetwork.com/tom-temin-
commentary/2018/01/...](https://federalnewsnetwork.com/tom-temin-
commentary/2018/01/irs-clutches-its-modernization-holy-grail/)

[2] [https://federalnewsnetwork.com/tom-temin-
commentary/2020/01/...](https://federalnewsnetwork.com/tom-temin-
commentary/2020/01/irs-programming-mystery-continues/)

[3] [https://federalnewsnetwork.com/wp-
content/uploads/2020/01/IR...](https://federalnewsnetwork.com/wp-
content/uploads/2020/01/IRS-patent-10_2019.pdf)

~~~
selimthegrim
Yes, this was it, sorry if I misremembered a few details

------
bryanmgreen
The question I'd like to ask any company that has a mission and compromises it
in a controlling-stake sale is: " _What justified you selling-out or was your
mission just a ploy?_ "

$7B is no small change, but I bet they could have come up with another
scenario that would have allowed them to make still substantive and life-
altering sums of money without compromising.

~~~
mcrae
Jeez man their mission wasn’t to solve world hunger or bring peace to the
Middle East. It was a credit app that refered people to credit products. They
sold to a financial company. Seems pretty consistent.

~~~
bryanmgreen
I'm not judging (at least not really in this scenario because, yeah, they're
not doing world-altering stuff), just scientifically wondering where a line
might be and why it would be put there in the first place.

------
lancewiggs
They acquired Mint years ago on the premise that a free consumer app selling
financial products would make a great return. That didn’t work. This smells
similar, with a dose of consolidation of the tax software market. (Pocketsmith
investor)

~~~
sp527
Were they not able to monetize it? I know Mint upsells and has some ads, but
was under the impression that the real value was in the data.

------
notadev
I used TurboTax again this year. I tried using a free alternative called
"FreeFillableForms" or something similar. It was like the site was made by
someone who was just trying to push something out that worked but was not very
intuitive. At some point I got to a point where I needed clarification and
just could not find it so I went back to TT.

After using TT, I clicked on one of the promotions and installed an app called
Turbo. It was a CreditKarma clone that gave me horrible scores that didn't
seem to mesh with any other source I could find. I think CreditKarm is just
going to be rebranded as Turbo.

~~~
WrtCdEvrydy
I like TaxAct.com... but I may be biased because it's pretty easy to use.

~~~
rubyfan
> I may be biased because it's pretty easy to use

Seems like a good reason to be bias.

I’ve used it for a while as well. Initially it was cheaper than TT but I have
to guess they are comparable now.

------
asadhaider
I wonder if this would affect their UK product which gives free credit
reports, I was moved over to them after Credit Karma US/CA acquired Noddle [0]
and they rebranded. It was a little frustrating that they gave no opt-out to
move customers and their data over to Credit Karma.

[0] [https://techcrunch.com/2018/11/04/credit-karma-acquires-
nodd...](https://techcrunch.com/2018/11/04/credit-karma-acquires-noddle-from-
transunion-and-expands-to-the-uk/)

------
sergiotapia
God dammit we need reform to make tax preparation companies extinct. Why is
something mandatory so complicated?

------
jitendrac
I am not from US,but I think It deserves Anti-trust scrutiny.

------
kull
Any good credit karma alternatives? Seems we must switch.

~~~
miked85
Both WalletHub and Credit Sesame are comparable.

------
s3graham
I was sort-of glad that Wealthsimple bought SimpleTax (Canada) before Intuit
had a chance to swallow them. Hopefully that one works out.

------
bathtub365
[http://archive.is/no4r5](http://archive.is/no4r5)

------
brianTheDog
They spends a bunch of money making taxes harder so we depend on them. Then
they buy out all their competitors. Intuit is a shit company. The government
needs to step in and break that up.

------
____hacker____
Bye credit karma. Consumers will make this deal another verizon tumbler.

------
neonate
[https://archive.md/no4r5](https://archive.md/no4r5)

------
jimbob45
Practical question: where else can I check my credit score for free?

~~~
intopieces
All my credit cards offer this now.

~~~
toomuchtodo
They offer your score(s), but they don’t offer you information about your
trade lines or specific information about those trade lines when changes
occur.

------
shmerl
Too bad. A solid reason not to touch Credit Karma ever again.

------
yalogin
Genuine question - what do they do? I thought they just offer credit checking
and monitoring services that look scammy a little bit. Didn’t realize there is
so much money in this, no wonder we see so many of these pop up.

~~~
anderspitman
Like every other "free" financial product, they try to manipulate people into
consumer debt. Oh and selling your data as a side hussle.

~~~
scarface74
They sell access to you. They don’t sell your data.

~~~
soared
Technically that is the same thing google and Facebook do.

~~~
scarface74
Exactly.

I’m not trying to be pedantic, but it’s important to be clear about the issue
before you start proposing solutions.

If the government passed a law tomorrow saying that companies couldn’t share
user data with third parties, it wouldn’t change anything about Facebook,
Google’s or Credit Karma’s business model.

Not that I’m saying we need government intervention.

------
chirau
By the way, how does Credit Karma make money?

~~~
vidanay
Advertising.

~~~
umeshunni
More specifically, lead gen for financial products like credit cards.

------
camel_gopher
Bye bye credit karma

------
twodave
For the tax payer who uses a free file option or one of the lower tiers of a
product like Turbo Tax, I consider it a crime that the government doesn’t do
the tax calc for those people and simply send out either a bill or a refund.

The government has all the information they need to do this, and over time the
gaps can be filled by requiring additional paperwork from tax entities like
employers, non-profits, financial institutions, etc. There is way less
paperwork this way and instead of filing a return one would simply file a
dispute with documentation or else accept the government’s numbers. For the
vast majority of Americans the math is dead simple.

For those of us who run a business and pass through as ordinary income, we
should really only have to file the business return, not both business and
personal.

~~~
spookthesunset
A certain political party who shall go unnamed views making taxes simple is
the same as raising them. They would argue that if all you got in the mail was
a postcard the government could raise taxes and you’d never notice.

Take that however you want, but that is why we don’t have easy taxes in the
US.

~~~
harryh
And the other major political party consistently adds complexities to the tax
code either as a form of social welfare or to extract revenue to pay for their
projects. The EITC, the AMT, the NIIT, all sorts of deductions.

Unfortunately, there is not really a constituency in either party for
simplified taxes.

~~~
jedberg
Just so you know, it was the GOP that passed the EITC and the AMT (in its
current form). The EITC was actually a Nixon proposal.

~~~
harryh
Huh. TIL. Well some pie in the face for me here. Though these have become DEM
interests over the years despite the source of their original passage.

~~~
klipt
I guess it shows that the GOP of today would oppose many policies of the GOP
of yesterday as too liberal. Eg Obamacare was originally conceived by a
conservative think-tank:
[https://www.forbes.com/sites/theapothecary/2011/10/20/how-a-...](https://www.forbes.com/sites/theapothecary/2011/10/20/how-
a-conservative-think-tank-invented-the-individual-mandate/)

------
scrooched_moose
Well crap. Time to file my taxes for this year and cancel my account.

This is the reason I won't sign up for any new startup ever - it seems that
eventually they all get acquired by one of the old guard behemoths anyway.

No matter how virtuous and privacy focused they are, that all gets destroyed
when someone buys them.

~~~
propogandist
CreditKarma was far from privacy focused, their T&C + Privacy policy gave them
lots of grounds to mine and sell user data.

Personal income information about users is generally 3rd party estimates for
ads/marketing industry, but by offering a free Tax service, CK was able gather
information on actual income about users, which is extremely valuable data.

This would be very lucrative for data-brokers or sold as targetable and
proprietary 'audience data', which can be combined with other data-sources to
support marketing activities.

~~~
scrooched_moose
They may not have been perfect (and I was aware of their policy), but there's
no scenario I can see where Intuit won't be dramatically worse.

~~~
perplex
I use hrblock online for taxes and at least there you can opt out of
information mining.

