Stock Watch: Microsoft Deal Boosts Stamps.com

On Monday, shares of online postage company Stamps.com (Nasdaq: STMP) soared 4-3/8 to 35 — a gain of more than 14 percent — after the company announced a significant distribution deal with Microsoft. Under the terms of the deal, Stamps.com’s service will be offered via the Microsoft Office Update Web site. Customers will be able to download Stamps.com’s free software directly from the Microsoft Office Update download Catalog.

The deal with Microsoft is notable because Microsoft has an equity stake in E-Stamp, which is a direct competitor to Stamps.com. Microsoft’s endorsement of Stamps.com may actually end up helping E-Stamp. After all, the deal with Microsoft has boosted Stamps.com’s market value. E-Stamp, meanwhile, has recently filed for an initial public offering. A favorable valuation for Stamps.com could result in a favorable valuation for E-Stamp, which would, of course, be good for Microsoft.

In a related announcement, Stamps.com said that its service will be available nationwide on September 27th. Stamps.com and E-Stamp recently received approval for its technology from the U.S. Postal Service.

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