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Company Presentation

November 2008



Safe Harbor Safe Harbor

This presentation contains forward-looking statements that involve risks and

uncertainties, including discussion of product and business plans and financial

projections. Important risk factors, including the company's ability to complete

its products and obtain regulatory approval, which could cause actual results to

differ materially from those in the forward-looking statements, are detailed in

filings with the Securities and Exchange Commission made from time to time by

Stamps.com, including its Annual Report on Form 10-K for the fiscal year ended

December 31, 2007, Quarterly Reports on Form 10-Q, and Current Reports on

Form 8-K. We encourage you to review the risk factors in these filings.



AgendaAgenda

PC Postage Service Overview

PC Postage Marketing

PhotoStamps

Financials



Service OverviewService Overview

Software-based Internet service that lets customers buy and print their own USPS postage

± Requires only your existing PC, printer & Internet connection

± Monthly service fee (+ the cost of postage)

Three ways to print postage

± Print your own stamps (NetStamps)

± Print shipping labels

± Print directly on envelopes



Internet Postage FeatureInternet Postage Feature

Print postage directly onto envelopes or onto labels

Internet postage is ideal for business and mass mailings

± Address verification and correction

±Integration with MSFT Word, Office and other address databases



NetStamps FeatureNetStamps Feature

Print your own stamps

± Use for any stamp value

± Use for any class of postage

Increased flexibility

± Not tied to an address

± No expiration date

Customers buy blank label stock

Photo NetStamps allow customersto print postage on blank labelstock with their customized logo

Consumable revenue stream



Shipping Label FeatureShipping Label Feature

All-in-one shipping label designed specifically for package use

Printed on plain printer paper or on adhesive labels

Discounts on postal rates

± 3% discount on Express1

± 1 ± 11% discount on Priority (average 3.5%)1

± 6 ± 8% discount on Global Priority & Express

± $0.57 - $0.65 per package for electronic delivery

confirmation

Ability to hide postage amount

E-mail tracking notifications

Avoid 1lb package restrictions1 Discounts on Priority & Express become effective May 12, 2008; 3.5% is the expected average discount on Priority per the USPS



Microsoft IntegrationMicrosoft Integration

Enhanced integration with Microsoft Office System 2003 & later

Access Stamps.com from multiple locations within Office

± Under Tools -> Envelopes and Labels (single envelope)

± As part of a Mail Merge (multiple envelopes)



Customer BenefitsCustomer Benefits

Save Time

± Mail or ship from home or office

± Avoid trips to the post office

± Available 24 hours x 7 days a week

Save Money

± Discounted postal rates (Priority, Express, Global Priority & Express)

± Discounted package tracking (Delivery and Signature Confirmation)

±Save 10% on package insurance compared to USPS

± Avoid costly returned mail with address verification

± Avoid wasted postage by calculating exact postage amount

±

Access to cost effective mail classes (media mail, parcel post, etc.)



Customer BenefitsCustomer Benefits

Enhance business productivity and image

± Produce more professional looking mail

± Easy mass mailings w/ Microsoft Word

±Track, control and reduce postage expenditures

Improve efficiency of shipping operations

± Hidden postage value allows shipping & handling markup

±Integrated Package Insurance

± Online package tracking capabilities with e-mail notifications



AgendaAgenda



PhotoStamps

Financials



Industry Overview

Large market opportunity1

± $51B U.S. Postage Market (addressable by STMP¶s solution)

± 8M Small Businesses + 14M Home Businesses

Significant barriers to entry exist

± Long and complex USPS regulatory approval process (2 ½ years for original approval, multi-year for NetStamps approval)

± Stamps has a very strong patent portfolio (66 issued, 100 pending US Patents)

Stamps.com is the category leader

± 3 approved PC Postage vendors (Stamps, Pitney Bowes, Endicia.com)

± ~85% of all PC Postage subscription customers2

1 Source: International Data Corporation Reports and USPS 2006 Annual Report (excludes Standard Mail & Periodicals)2

Source: USPS PC Postage Data and Stamps.com Company estimates; excludes estimated customers on a no-monthly fee plan.



Current SOHO PricingCurrent SOHO Pricing

$17.99 per month

Unlimited service usage

Auto-billed monthly

$5 free initial postage $25 free postage rebate1

Free scale rebate1

Pro Plan

Fees are in addition to postage (face value) and other supplies

Premier Plan

1 Certain Promotional items are redeemable after a customer completes their trial and is successfully billed

$24.99 per month

All features of Pro

Plus: FedEx Label Printing(and 5-10% discount)

Plus: Higher meter balance

Plus: More cost codes

Plus: Certified Mail Solution



Cost vs. A Postage Meter Cost vs. A Postage Meter

1 Price after 1 year promotional period is $25.75/month plus an extra $5/month for a 5 lb. scale (free 5 lb. scale includedw/Stamps.com)

2 Fee charged each time postage is purchased; first two resets in meter life are included for free and all resets are $5 thereafter.3 Based on USPS reports, total CY 2006 small business meter postage divided by CY 2006 average meter count.

4 Assumes one reset/month, $0.80 average per print, and meter cleaned as recommended. Range is for low cartridge (400) to

high cartridge (800) yield at avg. $185/month usage. Postal rate change updates cost extra with meter (free with Stamps.com).Cost codes also cost extra with meter (10 included with Stamps.com Pro Plan).

Category Entry Level Meter Stamps.com

Max. Print Speed 18 letters/minute At speed of printer

Monthly Fee(rental plus 5lb. scale)

$30.75/month1

(1-Year Auto Renew Lease)

$17.99(No Lease)

Proprietary Ink Cartridge $46.99 (400 to 800 prints)($0.06 to $0.12 per print)

None

Reset Fees $5 per reset2 None

Usage Per Month(# Prints/Month)

$1853

(~230 prints)

Not Relevant(Unlimited prints for $18)

Est. Total Cost Ownership $51 to $654 $18



Marketing ChannelsMarketing Channels

Stamps.com has a diversified set of marketing programs:

Affiliate Program

Direct Mail

Online Media (banners, permission e-mails, pop-ups, paid search words)

Referral Program

Stamps.com web site

Strategic Partners (Microsoft, EarthLink, Peachtree, Avery)

Telemarketing

Traditional media

Online Enhanced Promotion Channel1

1 Enhanced Promotion Channel includes partners that advertise our service on the Internet in which the partner typicallyoffers an incremental promotion (in addition to any promotion offered by us) in order to get the customer to try our service.



2008 PC Postage Plan

Increase and optimize our Small Business marketing investment

± Expect to increase customer acquisition spend in the non-enhancedpromotion channels (e.g. Direct Mail) by 25 - 30% in 2008

± Continue to run online enhanced promotion channel

Improve the customer experience

± Improve software usability to improve initial customer experience

Market our new Premier version

± Added Multi-user capability

± Market Premier as an up sell to existing customers

Market our corporate enterprise solution

± Continue scaling enterprise sales and marketing efforts

±Add product features to the enterprise version of our service



AgendaAgenda



PhotoStamps

Financials



PhotoStamps Offering

PhotoStamps allows customers to order valid US postage with customized

photos or images from a simple web site

± Customer uploads photo or graphic and customizes look & feel

± Customer places order online

± Stamps.com approves the image and prints the PhotoStamps sheets

± Customers receive PhotoStamps via mail in a few days

± Pricing is ~$5 to $10 per sheet plus the cost of postage1

1 Actual pricing depends on the number of sheets ordered and postage value per sheet; quotes for higher volume discounts available.



PhotoStamps Industry OverviewPhotoStamps Industry Overview

Customized postage program is regulated by the USPS

± Currently in the 4th market test with authorization through May 2009

± Only approved PC Postage vendors can provide the postage for customized postage products

Stamps.com is the category leader in customized postage

± 3 approved vendors: Stamps, Endicia, Pitney Bowes (w/ Zazzle, Fuji)

Market opportunity exists in consumer and business

± Consumer to Consumer First Class market is 6.1B pieces per year 1

± Business to Consumer First Class market is 17B pieces per year 1

1 Source: USPS 2006 Household Diary study



2008 PhotoStamps Plan2008 PhotoStamps Plan

Focus on improving profitability in PhotoStamps

± Reduce PhotoStamps consumer marketing spend by eliminatingunder performing marketing programs

± Expect lower revenue but improved profitability

Focus on growing business PhotoStamps

± Target high volume business usage of PhotoStamps through directselling efforts

Continue pursuing partnerships

± Target cost-effective partnerships to drive consumer PhotoStampsawareness and sales

± Current partners include Apple, Google/Picassa, HP/Snapfish,Adobe, Costco, American Idol



AgendaAgenda



PhotoStamps

Financials



Financial Overview

Stamps.com has several revenue components:

± Recurring monthly service fees (PC Postage)

± Online store sales of consumables and peripherals (PC Postage)

± Stamps.com branded package insurance (PC Postage)

± PhotoStamps market test sales

Stamps.com has an attractive financial model:

± High gross margins

± Leverageable fixed costs

± Low working capital investment

± Low capital expenditure requirements



Financial Overview

Stamps.com has strong free cash flow generation

± $15.7M Free Cash Flow1 in 2007

± $67M of stock repurchased from Jul-06 to Sep-08

Stamps.com has a strong balance sheet

±$94M cash and investments with no debt (as of 09-30-08)

± ~$240M in Federal NOL¶s and $150M in State NOL¶s (as of 09-30-08)representing ~$95M Deferred Tax Asset

± To preserve full use of the NOL¶s, the ³NOL Protective Measures´ werepassed by shareholder vote that restrict purchases of Stamps.com¶sstock that would create a new 5% shareholder without first obtaining awaiver from the Company¶s Board of Directors2

± The Company strongly urges investors interested in owning 725Kshares or more contact the Company first

1 Non-GAAP measure calculated as Net Income + 123R Expense + D&A ± Capital Expenditures

2 For full details on the ³NOL Protective Measures´ see the Company¶s definitive Proxy filed on 4-2-08



$0

$3

$6

$9

$12

$15

$18

$21

$24

$27

Q 3-06 Q 4-06 Q 1-07 Q 2-07 Q 3-07 Q 4-07 Q 1-08 Q 2-08 Q 3-08

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2003 2004 2005 2006 2007

Revenue Trend (millions)

Service Fee Revenue

Store, Insurance PhotoStamps

Licensing, other

$ 3 8 .1

$ 6 1 .9

$ 8 5 .8

$ 2 1 .2

$ 8 4 .6

$ 2 0 .2

$ 1 8 .9

$ 2 5 .0

$ 2 0 .0

$ 2 1 .4$ 2 0 .3

$ 2 4 .1

$ 2 1 .1 $ 2 1 .4



PC Postage RevenuePC Postage Revenue

Subscriber Related Revenue(Excluding Enhanced Promotion Channel)

( Millions)

Subscriber related revenue includes Service Fee,Store and insurance revenue ± estimate excludingthe enhanced promotion channel

Subscriber Related Revenue(Enhanced Promotion Channel)

( Millions)

Subscriber related revenue includes Service

Fee, Store and insurance revenue ± estimatefor the enhanced promotion channel



$17.1$17.1$17.0

$17.1$17.0

$17.4$17.5

$17.8

$15

$16

$17

$18

$19

Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

PC Postage Customer MetricsPC Postage Customer Metrics

Paid Customers 1

(Excluding Enhanced Promotion Channel)

(Thousands)

Avg. Monthly Subscriber Revenue per Paid Customer 2


258

267270

281

293

305

314312

240

250

260

270

280

290

300

310

320

330

Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08

2 Calculated as [ (Quarterly Service Fee Revenue + Store

Revenue + Insurance Revenue) / (Current Quarter Paid

Customers)] / 3 Months excluding customers acquired

through the enhanced promotion channel

1 Unique customers successfully billed at least once

during the quarter excluding customers acquired

through the enhanced promotional channel



Cost per Gross NewRegistered Customers1


Paid Customer Cancel Rate 2


2 Calculated as [ (Lost Paid Customers) / (Prior Quarter

Paid Customers + Current Quarter New Paid Customers) ]

/ 3 months excluding customers acquired through the

enhanced promotion channel

1 Estimated PC Postage small business sales and

marketing expense (excluding 123R) plus promotional

expenses / gross new registered small business

customers excluding customers acquired through the

enhanced promotional channel and excluding

enterprise marketing spend

3 3 13

3

3 33 3

1

2

3

Q Q1 Q2 Q3 Q Q1 Q2 Q3

$ 3

$1 3

$$

$

$1 1$9

$11

$

$

$

$1

$12

$1

Q Q1 Q2 Q3 Q Q1 Q2 Q3

PC Postage Customer MetricsPC Postage Customer Metrics



Gross Margin Trend

PhotoStamps Gross Margin(excluding R expense) ,

PC Postage Gross Margin(excluding R expense) ,

PC Postage gross margins do not include the Postage Face Value in either revenue or cost of sales

PhotoStamps gross margins include the Postage Face Value in both revenue and cost of sales

Non GAAP measure that excludes stock based compensation (FASB Statement R expenses); for reconciliation to GAAP

see the Company¶s prior K filings



Net Income & PC Postage SpendNet Income & PC Postage Spend

Non GAAPNet Income & EPS

..

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.

...

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.

.

.

.

.

.

.

.

.

.

Excludes stock based compensation ( R expenses), . Mnon cash tax benefit ( ) and K asset write off ( );

for reconciliation to GAAP see the Company¶s prior K filings

PC Postage Customer Acquisition Spend

Non GAAP measure includes both sales and marketingspend on the PC Postage business as well aspromotional expenses which are included in COS;

excluding R expenses

EPS . . . . . . . .



Key Investment TakeawaysKey Investment Takeaways

Large market opportunity ($51B US postage, 22M SOHOs)

Significant barriers to entry (USPS approval process)

Superior customer benefits at prices up to 75% less than meters

Category leader in PC Postage and Customized Postage

Attractive expected return on PC Postage marketing spend

Accelerating PC Postage revenue growth with high gross margins

Strong cash flow and balance sheet

march 08 pres

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