E-Stamp at Home in the Office

Online postage pioneer E-Stamp Corporation unveiled its service on the Microsoft Office Update Web site Thursday, just over two weeks after the U.S. Postal Service gave the go-ahead to sell stamps over the Internet.

The San Mateo, California-based company became the first of two ventures given approval by the Postal Service to unveil its service nationally. Rival Stamps.com is expected to start selling nationwide later this year.

The deal with Microsoft allows E-Stamp to sell digital stamps to customers using Microsoft Word, Microsoft Outlook and Microsoft Personal Address Book. Users can print the stamps directly onto a document while using Word and mail it in one of the company’s patented window envelopes. The envelopes are waiting for final U.S. Postal Service approval.

The company said it will sell these envelopes and other products in its online store when it opens later this year.

The deal with Microsoft was not entirely unexpected. The software giant bought a 10 percent equity stake in E-Stamp along with AT&T Ventures in 1997 and has participated in all three rounds of its equity financing. E-Stamp closed the third round earlier this month, having raised $30.2 million. Compaq and Excite@Home also participated in the latest investment.

“Today’s news reinforces the history shared by Microsoft and E-Stamp. Microsoft has been a long-time investor in E-Stamp and has participated in our Series A, B and C preferred stock rounds,” said E-Stamp CEO Robert Ewald. “I believe the nature and depth of our relationship speaks to Microsoft’s belief in our product and service offering.”

No More Postal Procrastination

Like many online products and services, E-Stamp appeals to the harried, disgruntled consumer who cringes at the thought of standing in line at the post office.

The service comes at a price, however. E-Stamp said its software — an electronic vault that plugs directly into a computer and stores the stamps once they have been downloaded — sells for $49.99 (US$). The company charges a 10 percent “convenience” fee for each postage purchase, ranging from $4.99 to $24.99.

In addition to its Microsoft agreement, E-Stamp has inked deals with Compaq and Yahoo! to sell postage on its properties.

Stamps.com also announced a similar agreement with Microsoft’s Office Update Web site this week. The company’s shares soared 25 percent after it announced the deal. It has also signed with AOL and Office Depot in a strong run up to its anticipated launch.

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