Stamps.com 2001 Annual Report Download - page 20

If we are unable to compete successfully, particularly against large, traditional providers of postage products such as Pitney Bowes who enter
the online postage markets, our revenues and operating results will suffer.
The market for Internet postage products and services is new and is intensely competitive. At present, Pitney Bowes has a software-based
product commercially available. Neopost Industrie has a hardware product commercially available. If any of our competitors, including Pitney
Bowes, provide the same or similar service as we provide, our operations could be adversely impacted. See Business--Competition.
Internet postage may not be adopted by customers. These customers may continue to use traditional means to purchase postage, including
purchasing postage from their local post office. If Internet postage becomes a viable market, we may not be able to establish or maintain a
competitive position against current or future competitors as they enter the market. Many of our competitors have longer operating histories,
larger customer bases, greater brand recognition, greater financial, marketing, service, support, technical, intellectual property and other
resources than us. As a result, our competitors may be able to devote greater resources to marketing and promotional campaigns, adopt more
aggressive pricing policies and devote substantially more resources to Web site and systems development than us. This increased competition
may result in reduced operating margins, loss of market share and a diminished brand. We may from time to time make pricing, service or
marketing decisions or acquisitions as a strategic response to changes in the competitive environment. These actions could result in reduced
margins and seriously harm our business.
If the market for Internet postage develops, we could face competitive pressures from new technologies or the expansion of existing
technologies approved for use by the US Postal Service. We may also face competition from a number of indirect competitors that specialize in
electronic commerce and other companies with substantial customer bases in the computer and other technical fields. Additionally, companies
that control access to transactions through a network or Web browsers could also promote our competitors or charge us a substantial fee for
inclusion. Our competitors may also be acquired by, receive investments from or enter into other commercial relationships with larger,
better-established and better-financed companies as use of the Internet and other online services increases. In addition, changes in postal
regulations could adversely affect our service and significantly impact our competitive position. We may be unable to compete successfully
against current and future competitors, and the competitive pressures we face could seriously harm our business.
If we do not respond effectively to technological change, our services could become obsolete and our business will suffer.
The development of our services and other technology entails significant technical and business risks. To remain competitive, we must continue
to enhance and improve the responsiveness, functionality and features of our online operations. The Internet and the electronic commerce
industry are characterized by rapid technological change; changes in user and customer requirements and preferences; frequent new product and
service introductions embodying new technologies; and the emergence of new industry standards and practices.
The evolving nature of the Internet or the Internet postage markets could render our existing technology and systems obsolete. Our success will
depend, in part, on our ability to license or acquire leading technologies useful in our business; enhance our existing services; develop new
services or features and technology that address the increasingly sophisticated and varied needs of our current and prospective users; and
respond to technological advances and emerging industry and regulatory standards and practices in a cost-effective and timely manner.
Future advances in technology may not be beneficial to, or compatible with, our business. Furthermore, we may not be successful in using new
technologies effectively or adapting our technology and systems to user requirements or emerging industry standards on a timely basis. Our
ability to remain technologically competitive may require substantial expenditures and lead time. If we are unable to adapt in a timely manner to
changing market conditions or user requirements, our business, financial condition and results of operations could be seriously harmed.
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2002. EDGAR Online, Inc.