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A dot-com whose time will come

Jan 13, 20034 mins
Enterprise ApplicationsMicrosoft should be a big success – someday – even though the company has taken quite a licking these past few years. Plus: Microsoft wristwatches. should be a big success – someday – even though the company has taken quite a licking these past few years.

Buying postage over the Internet instead of leasing a meter or standing in line at the post office made sense when was founded in 1996, it made sense when the company went public in 1999, and it makes sense today. The primary target market – small and home-based businesses – is enormous, penny-conscious and strapped for time.

The fact that hasn’t been a big success – heck, it hasn’t had a profitable quarter – can be attributed to the same mistakes that did in many dot-coms: biting off too much too quickly, underestimating the marketing challenge, and failing to make life easy for the customer. Although the company boasts 280,000 customers, its 82-strong workforce and $4.30 stock price are slivers of its heyday highs.

Whether will ever realize its promise depends not only on overcoming those early missteps but also a pair of potentially more troublesome forces: deeply ingrained postage-purchasing habits and Pitney Bowes, the 800-pound gorilla of business mailing. Attorneys for Pitney Bowes and have been whacking each other over the head with patent lawsuits, and it’s apparent that the gorilla can afford this gamesmanship more comfortably than can the upstart. CEO Ken McBride believes his company has made significant strides. “The overriding theme was simplification,” he says. “If you had been a user of early on you were likely to have been a technology early adopter with very good computer skills and the ability to go through a fairly onerous registration process.”

How onerous? Try two to three hours, including a “waiting period” mandated by the U.S. Postal Service, which licenses the handful of companies authorized to sell postage over the ‘Net.

“We ended up losing a lot of customers who would come to our Web site and seem to be very interested but would not make it through that process for obvious reasons,” McBride says.

“By this quarter [registration] should be down to about 15 minutes,” he says.

That still might be too long for a lot of people, but the improvement should help.

Also likely to help is a new feature called NetStamps introduced last summer. NetStamps lets customers print postage in any denomination directly onto sheets of labels as opposed to a pre-addressed envelope, which is a requirement of the earlier service that customers found constraining.

“It’s more like being able to print your own stamps at home,” McBride says.

It’s also a bone of contention between Pitney Bowes and

McBride says the company expects to achieve profitability by the third quarter, although he hedges by noting the uncertainty of those mounting legal bills.

Gates has time for this?

What’s next for Microsoft? Secret-decoder rings? GPS-enabled cuff links?

The question arises after last week’s Consumer Electronics Show keynote address by Bill Gates that touted his company’s foray into the world of . . . wristwatches? Microsoft is joining forces with timepiece makers Citizen and Fossil to peddle watches called SPOT – after Microsoft’s Smart Personal Objects Technology. The watches will depend on FM radio signals and DirectBand to bring lucky wearers the usual litany of consumer wireless joy: traffic, weather, news, sports, yada-yada.

Sure, you can put a chip in a toothbrush and some gadget freak will buy one so he doesn’t miss a baseball score while in the little boys’ room.

But that doesn’t make a watch called SPOT any less of a dog.

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