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E-Stamp not just stamps anymore

The online postage service may outgrow its name as it pushes beyond stamps and into shipping and managing orders.

E-Stamp, an online postage service, may outgrow its name as it pushes beyond stamps and into shipping and managing orders.

Today, the company acquired two e-commerce logistics companies, privately held Infinity Logistics and Automated Logistics. Combined, the deals are worth $7.5 million in cash and stock.

E-Stamp's move to diversify comes as it struggles to gain market share in an increasingly competitive sector. The company faces Net-only rival Stamps.com and Pitney Bowes, the traditional metering giant, as it pushes online.

E-Stamp has devised a strategy not unlike the United Parcel Service's move earlier this year to tackle an increasing need in e-commerce for services such as order fulfillment and supply management.

AMR Research forecasts that the combined warehouse management systems and supply chain management industry will grow to $18.6 billion by 2003.

At its annual shareholders' meeting earlier this month, E-Stamp CEO Robert Ewald stressed that the company will expand its strategy to capitalize on mailing and shipping services via the Internet. He added that it will delve into business-to-business e-commerce to provide logistics such as shipping, mailing and Web-enabled supply chain management.

Just last week, the company formed an alliance with Swissair for airline Internet ticketing, which will allow consumers to make reservations on some travel sites and print valid airline tickets directly from their home or office computers.

"Going into the enterprise segment is a good move, but the issue is how long will it take this business to ramp up," said Jeetil Patel, an analyst at Deutsche Bank Alex Brown, adding that E-Stamp must look at the technology it has, how it is positioned, and where it can take its business model.

The proposed shift in strategy has done little, however, to reverse the company's stock slide. Shares of E-Stamp are trading around a 52-week low of $3 after hitting a high of nearly $45. The stock is down about 86 percent year-to-date.

E-Stamp said that Infinity Logistics and Automated Logistics, based in Redwood City, Calif., will provide expertise, customers and technology in the enterprise shipping market and accelerate its plans to offer one-stop shipping services integrated with electronic logistics and fulfillment capabilities.

Infinity Logistics' key products include DigitalShipper.com, which integrates UPS, Federal Express, the U.S. Postal Service and most major small package and freight carriers into one customized Web site.

Automated Logistics has experience in enterprise shipping and supply chain management. It has more than 200 customers including Sony Music Distribution, Oracle, eToys and Intel.