Ruckelshaus gave a fairly strong statement about his company's eying other tax preparation targets when asked about the possibility during a webcast this week. "Consolidation in the space has been discussed. In certain cases, there would be advantages in combining with another player," Ruckelshaus said this week. Ruckelshaus noted that InfoSpace was largely interested in the TaxAct purchase because of its online presence. Online products represent about 75 percent of TaxAct's revenue while consumer desktop products are about 8 percent. The professional tax preparation products are about 9 percent and the remaining come from items such as bank products and stored value cards.

While he said he was not suggesting that TaxAct would get more aggressive on pricing, Ruckelshaus indicated that tool would be examined. "The company has not taken historically aggressive pricing. I think that is a lever they will use more judiciously," he said. He noted that TaxAct has been able to garner a loyal customer base by providing high-quality services and products without relying heavily on price.

Ruckelshaus was asked whether TaxAct might move into website design business as Intuit has. However, he did not directly answer the question. Instead he said, "We think there are opportunities to enhance the present of TaxAct on our web properties," he said. He added that InfoSpace would like leverage its search capabilities after tax season. Ruckelshaus said that "There going to opportunities to for the InfoSpace search business to more prominently display TaxAct." He also commented that InfoSpace was more likely to invest in TaxAct than cut costs aggressively.

He also said that TaxAct spends "well over" $25 million annually on marketing. Ruckelhaus said TaxAct spent "a fair amount of money in the search channel" and in online and offline marketing.

TaxAct had revenue of $78.1 million for the year ended September 30 and $37.8 million in adjusted EBITDA. The company will operate as a standalone unit in its current headquarters city of Cedar Rapids, Iowa. InfoSpace had $214 million in revenue for its year ended December 31, 2010 and $4.7 million in net income. The companies had pro forma revenue of $290 million and adjusted EBITDA of $72.5 million for the year ended September 30.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind