SAN FRANCISCO (AP) -- After pulling its punches for months, H&R Block Inc. has unleashed an ad campaign jabbing at a sore spot in the TurboTax software made by rival Intuit Inc.
While trying to boost sales of its own TaxCut program, Block is taking aim at an anti-piracy feature Intuit recently attached to its top-selling TurboTax programs that triggered a customer backlash.
In hundreds of online postings, consumers have railed against TurboTax's new product activation requirement for shackling the program's printouts to a single computer and secretly installing a security measure that consumes a computer's memory.
As part of its effort to placate offended customers, Mountain View-based Intuit recently pledged to make product activation less controversial next year.
But Kansas City, Mo.-based Block is trying to keep the product activation issue in the limelight with a marketing push on the Internet and in stores where the TurboTax and TaxCut are sold.
The ads emphasize that Block's TaxCut programs don't require product activation and can be easily used on multiple computers. Block's TurboTax barbs include an ad that declares, "Your tax software should instill confidence. Not install controversy."
Block is going on the offensive as the tax-filing season shifts into high gear. The company believes TurboTax's product activation is prodding disenchanted customers to consider alternatives, said Chrys Sullivan, Block's director of software products.
The mudslinging approach represents a change in tone.
When consumers first began complaining about TurboTax's product activation feature, Block refrained from criticism and even suggested it might adopt similar anti-piracy measures next year.
Block no longer is considering that possibility, Sullivan said, because "not having product activation has played well with the public."
Intuit believes the product activation outcry has died down and will fade entirely after the company fine tunes the feature next year.
"The concerns will all be put to rest," said Intuit spokesman Scott Gulbransen.
There's little indication the complaints about TurboTax have hurt Intuit so far.
In January, TurboTax Deluxe -- the nation's most popular tax preparation program -- held a 31.5 percent share of retail sales, up from 28.6 percent last year, according to NPD Group, a research firm.
Meanwhile, the market share of Block's TaxCut Deluxe fell from 14.2 percent in January 2002 to 13.9 percent in January 2003, NPD said.
Block paints a much different picture, drawing upon a broader range of confidential statistics provided to the company by NPD.
Based on retail sales of all TaxCut programs from Nov. 17 through Jan. 31, Block said its market share had climbed from 28.4 percent last year to 30.4 percent. TurboTax's total market share during the same period fell from 71.2 percent last year to 69.6 percent this year, Block said.
Investors are more interested in another number -- Intuit's revenue from TurboTax sales. In the company's most recent quarter ending Jan. 31, TurboTax generated $95 million, an 11 percent increase from the previous year.
