E-Stamp Expands Microsoft Alliance

Online postage provider E-Stamp (Nasdaq: ESTM) announced today that it has signed an agreement with Microsoft to expand the strategic alliance between the two companies.

The San Mateo, California-based E-Stamp said that the agreement with Microsoft will extend its reach to hundreds of thousands of small businesses that roam the MSN Network and its bCentral online business services.

E-Stamp will be the exclusive online postage provider on the bCentral site and will also have exclusivity in several small business and technology sections of the MSNBC site.

Launched in August, E-Stamp has received capital investment in the past from the software giant. Today’s agreement is expected to help the company in its pitched battle with Stamps.com (Nasdaq: STMP), which received the go-ahead from the U.S. Postal Service to offer online postage at the same time as E-Stamp.

E-Stamp is the premier postage provider on Microsoft’s Office Update Web site, and the two companies will run a series of online promotions to introduce the E-Stamp service to Microsoft customers.

“Today’s news clearly demonstrates Microsoft’s continued support of E-Stamp’s products and services,” said E-Stamp CEO Robert Ewald. “By expanding our alliance to include bCentral, we’re maintaining our strong focus on expanding our reach into the small and home-based business markets.”

On a Collision Course

E-Stamp and Stamps.com could soon have another company to contend with, as Pitney Bowes (NYSE: PBI), a $4.2 billion (US$) provider of mail and messaging products, said today that it has received approval from the U.S. Postal Service to begin the last phase of testing for its Internet postage service for small business.

The Stamford, Connecticut-based company said it will soon begin the nationwide testing of its product in preparation for its market launch.

Fierce Rivalry

While E-Stamp and Pitney Bowes made their announcements on the same day and are involved in the same field, there is little feeling of camaraderie between the two. Pitney Bowes filed patent infringement suits in a federal court against both E-Stamp and Stamps.com in June, alleging a violation of at least nine of the company’s patents.

E-Stamp filed a counterclaim against Pitney Bowes, alleging interference with its business practices. Meanwhile, both online postage providers are cooperating with a U.S. Justice Department antitrust inquiry into possible monopolistic practices by Pitney Bowes.