In another retarded attempt to stave off the cash siphoning Turbo Tax's tax preparation software has caused in its core business, Block has spent $287.5 million in cash to purchase TaxAct software creator 2SS Holdings Inc.
Destroy it, if history is any indicator. Block bought former internet powerhouse Compuserve in 1980, guiding it through the greatest growth period in it's history.
Then, a tiny little company named America Online came into the market. Rather than fighting the competitor's innovations, Block decided AOL was not a real threat.
Fast forward to 1997, when Compuserve stock was trading at $0.32, Block sold it to -- you guessed it-- AOL for chump change.
(Just for fun, replace AOL with Turbotax. Sound familiar?)
The company said it will combine its H&R Block At Home digital business and the TaxAct business into a single unit led by TaxAct management, but will continue to sell both brands, rather than acknowledging that the $2 billion spent on H&R Block At Home was flushed right down the sh-tter.
"In order to replace our craptacular home tax preparation software, which is as inferior to Turbo Tax as a skateboard is to a Ferrari," said H&R Block CEO __insert name here__. "We've decided to spend a third of a billion dollars to acquire Tax Act, which is slightly less craptacular."
More than 5 million tax returns were filed using TaxAct last tax season, which is about a day's worth of Turbo Tax's business.
Last season, Block disappointed 5.9 million digital preparation customers, screwing over about 2.2 million using its off-the-shelf software and about 2.9 million online. That was up a marginal 0.4 percent from 2009, while competitor Intuit Inc. reported 10 percent growth for TurboTax.
H&R Block: Whether in our office or at home with our software, let Block overcharge you for inferior service.