E-Stamp Sails into International Postal Waters

E-Stamp Corporation (Nasdaq: ESTM) announced today that it will begin a market trial of international Internet postage in the Canadian city of Calgary, Alberta. Starting in early February, Canada Post Corporation will begin offering Internet postage services through E-Stamp.

The Calgary market trial is E-Stamp’s first step toward offering its Internet postage service internationally. As with its U.S. postage sales, E-Stamp said it will target the small business and home office market.

European Postal Move

E-Stamp has also laid the groundwork for a move into Internet postage delivery in Europe. The company has invested in subsidiaries of Deutsche Post, which is the largest postal service in Europe, and Deutsche Telekom, a leading telecom provider in Germany. E-Stamp has also forged an alliance with Francotyp-Postalia, an international mailing systems vendor.

Busy Season for E-Stamp

E-Stamp has made a number of recent moves, including a ticketing service for entertainment events that was announced this week, and a number of alliances with such Internet companies as eBay, America Online, Yahoo!, Excite@Home, Intuit, Microsoft and Compaq.

Experts are unsure of the viability of online ticketing, since the service will depend upon acceptance by both venues and event goers. E-Stamp is also facing competition in the Internet ticketing market from Ticketmaster.com, which announced similar technology yesterday. With Ticketmaster more entrenched in the entertainment industry, E-Stamp faces an uphill battle.

Competition in Postage Market

Since it began offering its Internet postage services to small companies last fall, E-Stamp has signed up about 10,000 customers. By comparison, Pitney Bowes, Inc. (NYSE: PBI), which produces and services postage meters, has about one million rental customers for its postage meters.

Pitney Bowes plans to launch its own Internet postage product, ClickStamps, during the first quarter of 2000. Given its market position, its direct relationship with one million customers, and its credibility in the market, many analysts believe that it will instantly dominate the Internet postal market.

E-Stamp’s other competitor is Stamps.com, which offers a similar Internet postage service. Stamps.com customers pay a service fee of 10 percent of monthly postage printed, with a $1.99 minimum and a $19.99 maximum. E-Stamp charges a 10 percent service fee, with a minimum monthly charge of $4.99 and a maximum charge of $24.99. E-Stamp also charges a $49.99 start up fee.

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