Four companies are vying to become the first to win approval from the U.S. Postal Service for a new way to print stamps. All four have created Internet services that enable ordinary laser printers to print postage -- a big, ugly bar code that resembles a tiny tire mark -- on envelopes.
Officials hope to approve the first of these programs sometime this summer for sale to the public. For the moment only selected "beta testers" are allowed to use the systems, which postal officials believe will reduce the demand for stamps among thousands of small businesses.
"This is the future," former postmaster general Marvin T. Runyon proclaimed when he inaugurated tests of the first such system in March 1998. Since then Runyon has left the Postal Service, but he has become a director and a shareholder in one of the four firms, a role that obviously reflects his belief in the new systems.
-- Bill McAllister
In March 1998, E-Stamp Corp. of Palo Alto, Calif., became the first company to begin testing its system. Its president at the time said it could be selling personal postage kits for less than $199 within months, a prediction that's yet to come true. The E-Stamp attaches a small "stamp vault" device to a personal computer. When linked to an Internet site, "postage" can be purchased from E-Stamp, stored in the coin-size vault and then drawn down as envelopes are printed.
Privately owned E-Stamp has attracted some big-name Washington investors including Jack Valenti, president of the Motion Picture Association of America. But it has encountered problems, most recently being accused of patent infringement by Pitney Bowes, the large postage meter company. The company has rejected the claim and says it plans to begin sales this summer.
It has recruited its top executives from Silicon Valley and has signed partnership agreements with America Online Inc., Microsoft Corp., Compaq Computer Corp. and Yahoo Inc. to market its services. Microsoft Corp. and AT&T Ventures are among the firm's financial backers.
Initially called StampMaster, Stamps.com is a Southern California company that is the brainchild of three business students at the University of California at Los Angeles. Unlike E-Stamp, Stamps.com relies entirely on software, instead of a peripheral device, to print its postage.
Stamps.com recently filed a registration statement with the Securities and Exchange Commission indicating it plans to raise $57.5 million through an initial public offering of stock. Its prospectus warns investors that it has no certainity of winning postal approval and that the market for Internet postage is subject to "substantial uncertainity." Among the firm's directors are Runyon and Loren Smith, the former Postal Service marketing manager who was one of Runyon's top aides.
Among the system's fans is immigration lawyer Kenneth Rinsler, who has been testing the service for his office. "I think it's very impressive," he says.
For decades Pitney Bowes Inc. has had a virtual monopoly on the postage-meter business, and it was a surprisingly late entrant into the race for computer postage. But company officials say that should not be regarded as a sign that the publicly held Stamford, Conn., firm lacks a commitment to the new technology.
After all, Pitney Bowes had to fight with postal officials for years to win acceptance of its first postage meter. It has a large research and development program and has suggested that others, in addition to E-Stamp, may have violated its patents. Both E-Stamp and Pitney's ClickStamp require a small "stamp vault" attached to personal computers to print stamps.
It says the new system won't destroy its vast meter business because personal computers will open a large market, the so-called SOHO (small office and home) market, which its meters have failed to penetrate.
The big French-owned postage- meter company has long operated in the United States -- and its California subsidiary is testing the two ways of computerized stamp printing -- one using software entirely and another using a wallet-size stamp "vault."
Although it was the last of the four to begin this testing, Neopost already has one new computerized stamp product on the market. It is a small thermal printer called "Simply Postage" that downloads "value" from the Internet and then prints meter-like stamps on adhesive paper. Because it is similar to meters, doing nothing but printing postage, Simply Postage has not had to undergo the same testing that the others did.
Neopost has launched a major ad campaign to promote its brand name. Its ads claim the "Simply Postage" system frees you from one of life's little hassles -- buying postage: "You probably don't think about postage until you're stuck in line at the post office."