Senior Reporter

The U.S. Postal Service has long boasted that neither rain nor sleet nor dead of night will deter the mail. Neither will slow modems or bandwidth problems, if a Santa Monica start-up has anything to say about it. allows Web surfers to download electronic stamps over the Internet and output them from a PC printer, in effect creating a personalized post office right in the home or office.

After downloading the company's free Internet postage software, customers can purchase postage from's Web server in blocks of $20, $40, $100 and $200, by using a credit or a debit card or via electronic transfer from a checking or savings account. The bar-coded postage then can be downloaded as needed, printed onto any envelope, label or letter that fits into a printer. makes money by charging a transaction fee 10 percent of the total purchase for most customers. The service, which currently is being tested in Washington, D.C., and San Francisco, is expected to launch nationwide in May.

"Everybody hates going to the post office," said John M. Payne, the company's president and chief executive. received a big boost last week, when it announced that it had raised $30 million from a group of investors that includes Microsoft Corp. co-founder and billionaire Paul Allen's venture fund Vulcan Ventures. Other investors include GeoCities Chairman David C. Bohnett, former U.S. Postmaster General Marvin Runyon and Loren E. Smith, former chief marketing officer of the U.S. Postal Service.

Company officials say the backing will help them target the approximately 30 million small and home-based businesses that spend between $50 and $250 a month on postage a sum that hardly justifies leasing a postage meter at a cost of between $30 and $120 a month, plus a periodic fee to reset the machine.

Payne figures these companies would be happy to pay between $5 and $25 for the convenience of simply downloading postage from the Web. hardly has the market to itself. Palo Alto-based E-Stamp Corp., the French company Neopost and Connecticut-based postage giant Pitney-Bowes Inc. also have received approval from the U.S. Postal Service to develop Internet postage and are expected to unveil their own offerings this year.

Competition is sure to be fierce. Americans spend an estimated $44 billion a year on first-class postage, including $13 billion on stamps alone and spending on electronic postage will jump from almost nothing to $127 million in 2000 and $1.9 billion in 2005, according to Keenan Vision Inc., a San Francisco marketing firm.


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