Stamps.com 2001 Annual Report Download - page 8

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The US Postal Service certification process for Internet postage is a standardized, ten-stage process. Each stage requires US Postal Service
review and authorization to proceed to the next stage of the certification process. The US Postal Service has no published timeline or estimated
time to complete each of the ten stages of the program. The most significant stage is the ninth stage, which requires a vendor to complete three
phases of beta testing.
The entire approval process for Stamps.com took approximately two and one half years. In March 1997, we submitted our letter of intent to join
the Information Based Indicia Program. From March 1997 through August 1998, we progressed through the first eight stages of the US Postal
Service certification process. On August 24, 1998, the US Postal Service announced that we were approved for beta testing and our Internet
Postage service became the first software-only postage solution approved by the US Postal Service for market testing. Between August 24,
1998 and August 9, 1999, we successfully completed the three-phase beta testing required by the US Postal Service's certification process. On
August 9, 1999, we became the first software-only Internet postage solution approved for commercial release by the US Postal Service.
Our Marketing of Internet Postage
Our Internet Postage service is currently targeted primarily at small businesses, home offices, and individuals. We market our Internet Postage
service in several ways, including the following:
Web Partner Channel. In this channel, we work with strategic partners in order to leverage their Web site traffic, Web customer bases or other
distribution in order to distribute our Internet Postage software. These partnerships provide our potential customers the opportunity to download
our software and access our Internet Postage service from several different places on the Web. For example, we have a partnership with
Microsoft that makes our software available for download from the Office Update section of their website, a site that many small businesses
visit in order to update their Microsoft Office products.
Software Partner Channel. In this channel, we make a copy of our free software available on a partner's CD-ROM that gets distributed to their
existing or prospective customers. We have partnerships with companies who offer small business productivity software, financial software, or
Internet services. For example, we currently have partnerships with Elibrium, Peachtree, and Earthlink.
Hardware Partner Channel. In this channel, we make a copy of our free software available along with a partner's hardware device. We have
partnerships with companies who offer PCs, printers that are used by small businesses, and label makers that can print Internet postage. For
example, we currently have partnerships with Hewlett Packard, IBM and Dymo.
Retail Partner Channel. In this channel, we make a copy of our free software or a marketing brochure available at a partners' retail location. We
have partnerships with companies who sell office supplies and computer equipment at retail. For example, we currently have partnerships with
Office Depot and CompUSA. We are also running a pilot program with the US Postal Service to increase our presence at retail post offices.
Office Supplies Partner Channel. In this channel, we make a copy of our free software or a marketing brochure available along with a partners'
office supply product. We have partnerships with companies who offer envelopes, labels, checks and other small business forms. For example,
we currently have a partnership with NCR.
Affiliate Channel. In this channel, we utilize the traffic and customers of smaller web sites and other businesses or individuals that are too small
to qualify for a partnership directly with Stamps.com. Our affiliate channel is currently managed by Be Free, Inc. We offer financial incentives
for these small businesses and individuals to drive traffic to our Web site. We currently have approximately 35,000 affiliates in our program.
5
2002. EDGAR Online, Inc.