findMatchingChars.c

int findMatchingChars(char *string1, char *string2, char *outString){
	int matchFound = 0;
	while(*string1 && *string2){
		if(*string1 == *string2){
			outString[matchFound++] = *string1;
		}
		++string1;
		++string2;
	}
	outString[matchFound] = 0;
	return matchFound;
}

MatchingCharsMain.c

int findMatchingChars(char *string1, char *string2, char *outString);
#include <stdio.h>
int main(int argc, char**argv){
char outString[30];
int count;	
	if(argc <= 2){
		printf("Usage: matchCharsMain string1 string2");
	}
	else{
		count = findMatchingChars(argv[1], argv[2], outString);
		printf("%s %d", outString, count);
	}
	return 0;
}