E-Stamp Hopes to Lick Competition with eBay Deal

E-Stamp, a provider of postage over the Internet, scored a coup on Wednesday, striking an exclusive distribution deal with leading auction site eBay.

The agreement, financial terms of which were not disclosed, makes E-stamp (ESTM) the sole provider of Internet postage on eBay's (EBAY) Web site. E-Stamp will be prominently featured on the eBay site, which has 7.7 million members, and receives around 10 million unique visitors a month.

The two companies have a special affinity, since people selling products on eBay use a lot of postage sending the sold items to the buyers.

The E-Stamp strategy includes offering eBay members discounts on the hardware needed to start downloading postage from the Internet, and it will also reduce convenience fees for eBay users.

The companies will together create a co-branded micro-site and conduct joint promotions to top sellers, direct mail outreach and co-branded mailing supplies.

E-Stamp and eBay tested the first joint promotion in December, making a special holiday offer to members.