Stamps.com 2006 Annual Report Download - page 25

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PhotoStamps
®.
On May 17, 2006, we publicly launched our third market test of PhotoStamps, a patented form of postage that allows consumers to turn
digital photos, designs or images into valid U.S. postage. With this product, people can now create customized U.S. postage using pictures of
their children, pets, vacations, celebrations and more. PhotoStamps is used as regular postage to send letters, postcards or packages. The
product is available via our separately-marketed website at www.photostamps.com. Customers upload a digital photograph or image file,
customize the look and feel by choosing a border color to complement the photo, select the value of postage, and place the order online. Each
sheet includes 20 individual PhotoStamps, and orders arrive via US Mail in a few business days.
Since the beginning of the second market test on May 17, 2005, PhotoStamps has been prominently featured in the national media. For
example, in its December 19, 2005 issue, BusinessWeek named PhotoStamps one of the best products of 2005. From the May 2005 to
December 2006, we shipped more than 1.5 million sheets, or more than 30 million individual PhotoStamps.
PhotoStamps is currently available under authorization of the USPS for its third phase market test, with an initial authorization for one year
through May 16, 2007 and an option for the USPS to extend the test for a second year.
Mailing & Shipping Supplies Store
With the launch of NetStamps in July 2002, we began selling NetStamps labels directly to our customers via our Supplies Store
(previously also referred to as our “Online Store”) which is available to our customers from within our PC Postage software. Our Supplies
Store has since expanded to sell themed NetStamps labels, shipping labels, other mailing labels, dedicated postage printers, OEM and private
label inkjet and laser toner cartridges, scales, and other mailing and shipping-focused office supplies.
In September 2006 we launched a brand new Mailing & Shipping Supplies Store within version 6.0 of the PC Postage client software. This
new store features a totally overhauled and reorganized store catalog, same day shipping capabilities, strong messaging of our free or
discounted shipping promotions, strong cross sell during checkout, SKU search capabilities, and new expedited and rush shipping options. We
plan to continue to increase the breadth of products offered in our Supplies Store, in order to enhance our customer convenience.
Branded Insurance
We offer Stamps.com branded insurance to our users so that they may 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 special forms. We also offer official U.S. Postal Service insurance
alongside our branded insurance product. Our insurance is provided in partnership with Parcel Insurance Plan and is underwritten by Fireman’
s
Fund.
Recent Developments
On November 3, 2006 Stamps.com’s Board of Directors approved a one-year share repurchase program authorizing our Company to
purchase up to $20 million of Stamps.com stock as market and business conditions warrant (the “November 2006 Program”).
During the fourth
quarter of 2006 and in the first quarter of 2007 to date, our Company purchased approximately 0.8 million shares for a total amount of
$12.0 million under the November 2006 Program.
On February 8, 2007, Stamps.com’s Board of Directors approved an additional share repurchase program authorizing our Company to
purchase up to $20 million of Stamps.com stock as market and business conditions warrant (the “February 2007 Program”).
The February 2007
Program will commence when the November 2006 Program is completed and will expire one year from its commencement date.
Share purchases may be made from time to time on the open market or in negotiated transactions in compliance with Rule 10b-18 of the
United States Securities and Exchange Commission. Our Company’s purchase of any of our shares is subject to limitations that may be
imposed on such purchases by applicable securities laws and regulations and the rules of the Nasdaq Stock Market. Purchases may be made in
the open market, or in privately negotiated transactions from time to time at our Company’s discretion. The timing of purchases, if any, and the
number of shares to be bought at any one time will depend on market conditions.
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