A recent television advertisement here in New York caught my eye. A man, realising he is out of stamps, decides to take a trip to the post office. Before leaving home he takes a good look at a picture of his wife and dog. On his return, he finds that his wife has remarried and his golden retriever has been replaced by a poodle.

This ad, titled the Wedding Picture, is promoting E-Stamp, an Internet postage product. It plays on our common perception of long, tedious waits at the post office versus the time-saving benefits of buying stamps on the Internet.

The US Postal Service has not introduced a new form of postage payment since 1920 with the advent of the postage meter. About 18 months ago, in an effort to improve operational efficiency and reduce the millions of dollars lost annually to fraud, the Postal Service started the Information Based Indicia Program (IBIP) to increase product security and to take advantage of current computer technology.

The program developed a new form of postage - a two-dimensional, machine-readable bar code - that will function similarly to a postage stamp or traditional meter imprint. This new application contains a digital signature making each indicia unique and therefore difficult to counterfeit without detection. The Information Based Indicia is printed on an envelope in the upper right-hand corner or on a label for an envelope or package, to indicate postage payment.

After a year of field testing with a few thousand customers, the US Postal Service has given its seal of approval to two companies to sell postage over the Internet. They are E-Stamp Corp of San Mateo, California and Stamps.com of Santa Monica, also in California.

E-Stamp began offering Internet postage nationally on August 9th. At the end of its first quarter, it had more than 13,000 customers. Companies such as Excite@Home, Deutsche Post and Deutsche Telekom have invested in it along with Microsoft, Compaq and AT&T Ventures. It went public on October 8th and raised about $126 million (€121 million), 65 per cent of which it intends to spend on marketing and customer acquisition.

E-Stamp enables customers to buy, download and print postage directly from their computers. The purchased postage can be printed onto envelopes, labels or documents using standard laser or inkjet printers, without the need to remain connected to the Internet. Users buy postage online using a major credit card, transferring funds electronically or pre-paying by cheque. Postage is then downloaded and secured in the E-Stamp Security Device, an electronic vault that connects to a PC's printer port.

This vault device needs to be ordered from E-Stamp. Users can then print out envelopes in standard word processing or business applications. E-Stamp will verify the address and print a stamp with the correct postage, deducting the amount from the electronic vault.

With Stamps.com no additional hardware is needed. The user downloads free software from the website and sets up an account to begin printing postage for all types of mail and packages, including First Class Mail, Priority Mail and Express Mail. Senders can print a return and delivery address on each letter. The online address matching system verifies the address and automatically supplies any missing information, such as a zip code.

The Stamps.com software allows users to track the date, weight, mail class, postage amount and the recipient of all postage printed. A built-in postage calculator takes the mail weight entered to the nearest ounce and automatically applies the right amount of postage every time.

By using a digital scale, which can be bought at the Stamps.com on-line store, the mail piece weight will automatically link to the Stamps.com software and instantly calculate exact postage.

Stamps.com went live nationally on October 22nd, although the company has been around since 1996. It has already registered 100,000 customers and has 4,000 partners on board within its first month of doing business. These affiliate partners establish a Web link from their site to Stamps.com and can earn commissions for each referred customer that signs up for the service. Partners include 3M, America Online, IBM, Microsoft, Office Depot and Quicken.com. In fact, over the next three years America Online will invest $56 million in the company and has designated Stamps.com the exclusive provider of Internet postage on AOL, Netscape and Compuserve branded CD-ROMs.

Stamps.com has also agreed to acquire privately held iShip.com, a company that provides Internet-based shipping technology. The agreement will combine iShip.com's Web-based multicarrier shipping technology with Stamp.com's Internet postage service so customers can mail, ship and track their packages. iShip is the exclusive provider of on-line shipping services for eBay's 5.6 million registered users.

Unusual for start-ups, both EStamp and Stamps.com have seasoned management on their boards. Stamps.com named Loren Smith president and chief operating officer. Mr Smith has more than 40 years of experience, having been chief marketing officer of the US Postal Service and vice-president in Citibank's consumer services group. Former US Postmaster General, Mr Marvin Runyon, is also a director of the company.

E-Stamp's president and CEO Robert Ewald was formerly chief operating officer and executive vice-president of computer systems at Silicon Graphics. EStamp recently announced the appointment of Ms Rebecca Saeger, executive vice-president of brand marketing at Visa USA, to its board of directors.

Both companies are wasting no time marketing themselves. In the past month, they have launched multimillion dollar national television advertising campaigns, business and trade print advertising, banner advertising, online promotions and direct marketing programmes.

They are aggressively trying to sign up those who work from home. Of the US's seven million small businesses and 24 million home-based businesses, 70 per cent use computers and about 40 per cent are connected to the Internet.

The small office and home office market account for a substantial portion of the $44 billion stamp and postage meter marketplace even though there are only 1.7 million postage meters in use in the US today.