AOL-Backed Stamps.com Launches Service

Bolstered by a new deal with AOL (NYSE: AOL), online postage company Stamps.com (Nasdaq: STMP) announced today that it has launched its Internet Postage service, which allows customers to buy postage online and print it out on standard printers.

The service does not require any additional hardware for customers who already have a computer, printer and Internet connection. According to the company, more than 100,000 customers pre-registered for the service.

“Stamps.com has taken a very simple need — postage — and leveraged the widespread adoption of the Internet to fulfill that need,” said CEO John Payne.

Yesterday, Stamps.com announced a three-year, $56 million (US$) distribution and marketing deal with America Online. The alliance makes Stamps.com the exclusive provider of online postage on AOL, Netscape and CompuServe-branded CD-ROMs.

Stamps.com will also be the premier online postage provider in selected areas across several AOL brands. In addition, AOL will make a multi-million dollar investment in Stamps.com.

Stamps.com has other alliances with IBM, Microsoft, Office Depot, Quicken.com and 3M.

How The Service Works

Stamps.com’s online postage can be printed using laser or inkjet printers on all standard mail pieces and mailing labels.

The company’s technology can be integrated with word processing programs to allow users to print addresses directly from programs such as Microsoft Word, Lotus Word Pro and Corel WordPerfect.

A built-in postage calculator can take the weight of the mail entered to the nearest ounce and calculate the necessary amount of postage. Customers who wish to use a digital scale that directly links to Stamps.com’s software can purchase one from Stamps.com.

Stamps.com offers two pricing plans for its postage service. The plan targeted to small businesses charges a 10 percent service fee for postage, with a minimum of $3.99 and a maximum of $19.99 each month. The plan targeted to individual users charges a $1.99 flat service fee each month for up to $25 worth of postage. There is a 15 percent fee for any postage purchased over $25, with a maximum monthly charge of $19.99.

Stock Impact

Shares of Stamps.com, which is competing with E-Stamp in the early battle for online postage market share, were up 2-3/8 to39-1/2 in early trading today, a gain of 6.4 percent. The stock is off its high of 52-1/2 reached earlier this year, but has been a notable performer since Stamps.com went public at $11 on June 24th.

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