Stamps.com 2004 Annual Report Download - page 21

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19
Storage Technologies (Thailand), Ltd., in the United States District Court for the District of Minnesota. The
complaint alleges infringement of a patent allegedly covering use of data matrices and seeks an injunction,
unspecified damages, and attorneys’ fees. We dispute the plaintiffs’ claims and intend to defend the lawsuit
vigorously.
Our Services
We offer or have offered the following products and service to our customers:
y Internet Postage Service. Our US Postal Service approved Internet Postage service enables users to
print information-based indicia, or electronic stamps, directly onto envelopes or labels using ordinary
laser or inkjet printers. The service can be used for any class of mail except standard mail or
periodicals including First-Class Mail®, Priority Mail®, Express Mail®, Parcel Post™, Media Mail™
and Bound Printed Matter. Customers can also add USPS Special Services such as Delivery
Confirmation™, Signature Confirmation™, Registered Mail, Certified Mail, Insured Mail, Return
Receipt, Collect on Delivery (COD) and Restricted Delivery to their mail pieces. Our service requires
no additional hardware—the user’ s existing PC, printer and Internet connection are sufficient. Our
software can be downloaded from the Internet or installed from a CD-ROM free of charge. After
installing the software and completing a registration process, customers can purchase and print postage
24 hours a day, seven days a week from their PCs. When a customer purchases postage for use through
our service, the customer pays face value, and the funds are transferred directly from the customer to
the US Postal Service. Customers currently signing up for our service pay a monthly convenience fee
of $15.99. Our current customer mix includes monthly convenience fees ranging from $4.49 - $19.99
based on earlier pricing and promotion. As of December 31, 2004 our customer base consisted of
approximately 358,000 customers who have downloaded our software and registered for one of our
service plans.
Stamps.com offers its customers three primary ways to print Internet Postage. First, NetStamps™
enables customers to print postage for any value and any mail class on NetStamps labels. NetStamps
can be used just like regular stamps. Second, shipping labels allow customers to print postage for
packages on plain 8.5” x 11” paper and add electronic Delivery Confirmation at discounted prices.
Third, Stamps.com’ s original online postage solution for mailing, which is typically printed directly on
envelopes or on other types of mail or labels, in a single step process that saves time and provides a
professional look. Our Internet Postage service also incorporates address verification technology that
verifies each destination address for mail sent using our service against a database of all known
addresses in the U.S. In addition, our Internet Postage service has been designed to integrate well into
common small business and productivity software applications such as word processing, contact and
address management, and accounting and financial applications.
y PhotoStamps™. On August 10, 2004, the Company publicly launched a limited market test of
PhotoStamps™, a new form of postage that allowed consumers to turn digital photos, designs or
images into valid US postage. For the first time ever, people could create customized U.S. postage
using pictures of their children, pets, vacations, celebrations and more. PhotoStamps can be used as
regular postage to send letters, postcards or packages. The product was available via our separate
website at www.photostamps.com. Customers upload a digital photograph or image file, customized
the look and feel by choosing one of ten different border colors to compliment the photos, selected the
value of postage, and placed the order online. Each sheet included twenty individual PhotoStamps, and
orders arrived via US Mail in a few business days. The limited market test ended September 30, 2004
and the test results are currently being reviewed by the US Postal Service.
y Online Store. With the launch of NetStamps in July 2002, Stamps.com re-opened an online store for
selling NetStamps consumables direct to its customers. The Stamps.com store has since expanded
to sell themed NetStamps labels, shipping labels, Internet Postage labels, dedicated postage printers,
OEM and private label inkjet and laser toner cartridges, scales, and other mailing and shipping-focused
office supplies. Stamps.com plans to continue to increase the breadth of products offered in its online
store, in order to enhance convenience for our customers.
y Branded Insurance. The Stamps.com branded insurance offering allows users to insure their mail or
packages in a fully integrated, online process that eliminates any trips to the post office or the need to
complete any forms. Stamps.com also offers official US Postal Service insurance along side its
branded insurance product. Stamps.com Insurance is provided by Parcel Insurance Plan and
underwritten by Fireman’ s Fund.