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E-Stamp Re-routes Business Model

Its stock price having reached the negligible range, E-Stamp Corp. said today it is "phasing out" its Internet postage product line and will instead focus on its Web-based shipping and logistics solutions.

The company's stock closed Friday at 28 cents, down from a 52-week high of almost $45. After the news this morning, the stock doubled to 56 cents in early trading.

As part of the change in focus, the company is cutting its staff by approximately 30 percent, but did not say how many jobs that represents.

E-Stamp said it was the first company to receive Postal Service approval for Internet postage technology and the first company to offer Internet postage commercially.

"The business reality of operating in a highly-regulated environment, combined with the change in valuation models of Internet companies, were key factors influencing our decision to phase out our postage business " said Robert Ewald, president and CEO of E-Stamp.

E-Stamp said it has partnered with French postal equipment maker Neopost Online to encourage its postage customers to adopt Neopost's Internet Postage solution, called "Simply Postage."

Over the past two quarters, the company acquired two logistics companies, and Ewald said the "greater market opportunity is presented by our logistics solutions, Digital Shipper and e-Warehouse."

As of the end of the third quarter of 2000, E-Stamp said its cash and cash equivalents totaled approximately $40 million.

The Internet postage business has not been an easy go for anyone; competitor Stamps.com , which laid off 240 workers in October, is trading at $3, down from a 52-week high of $98.50. The job cuts came two weeks after Chief Executive Officer John Payne and several other top execs all quit.