As the US Postal Service gears up for the introduction of internet postage services, E-Stamp Corp, the San Mateo, California-based start-up, is today announcing what could be a crucial tie-in deal with Microsoft Corp. Microsoft will take the company’s internet stamp software as a featured service on its Office Update website, making it available to Microsoft Office users as soon as the Postal Services gives the go-ahead later this summer. Microsoft has invested twice in E-Stamp, and holds a stake of around 10%. It also has a seat on the company’s board.
Using the services, customers will be able to buy stamps over the internet and print them directly onto envelopes. Trials are currently underway in Washington and California. The services will initially be aimed at small businesses and home offices not large enough to buy or rent a mail metering machine, estimated to be around eight million in number, but eventually it is likely to make existing mail metering systems obsolete. It will also be the basis for a new push by the US Postal Service into priority and express mail services, which will use it as an advantage over the courier firms. One other start-up, Stamps.com, and two traditional mail machine companies, Pitney Bowes Inc and Neopost Inc, are also participating in the trials.
The Microsoft connection could be E-Stamp’s biggest trump card against its chief rival, Stamps.com, previously known as StampMaster Inc. Stamps.com’s internet postage systems doesn’t require and software to be downloaded onto the user’s system, nor does it require the hardware security system. Instead it handles everything from its own secure web site. Analysts have argued that this gives the company an advantage over E-Stamp, which requires users to download software, and includes a hardware-based security system attached to the PC’s parallel port. That device – a secure storage chip made by Dallas Semiconductor Corp – gets round Postal Service rules about storing monetary value on a hard disk. Users can add credit to the vault through online fund transfers from their bank accounts.
E-Stamp argues that its system isn’t a disadvantage. It says that mail preparation is largely an offline activity in any case, and that its customers value the value of printing stamps without needing a permanent internet connection. We anticipate that 90% of our customers will be using dial-up connections a spokesperson for the company told ComputerWire. It argues that Stamps.com’s software requires cutting and pasting of information between its application and Microsoft Word. With the E-Stamp system, the software is operated directly from an icon on the Office toolbar, and can be used with 17 variations of address books. The hardware vault may also be used for related online services in the future, such as for printing airline or theater tickets, says the company.
E-Stamp also has deals with America Online Inc and Yahoo! Inc, while Stamps.com also has an AOL agreement, and one with Intuit Corp for Quicken. Given its recent anti-trust problems, it’s possible that Microsoft will offer more than one internet postal service in the future. Both services are expected to take a 10% service fee. E-Stamps said the retail price of its system will be under $50.
