Company Returns Over $250 Million to Shareholders Since 2002

LOS ANGELES – October 28, 2010 –® (Nasdaq:STMP) today announced that its Board of Directors has declared a one-time special dividend of $2.00 per share to shareholders of record as of the close of business on November 11, 2010, to be paid on December 2, 2010. The Board of Directors approved the special dividend to distribute excess cash from the Company’s capital structure, and to allow the Company’s shareholders to take advantage of the current low dividend tax rate.

The total amount of cash distributed in the dividend is expected to be approximately $28.5 million. The Company expects to incur one-time expenses of approximately $3 million during the fourth quarter of 2010 related to the special dividend and its effect on employee stock options; the actual expense may vary depending on the pre-dividend stock price. The Company anticipates ending 2010 with approximately $35 million in cash and investments.

“As a result of a more optimized capital structure, we expect to realize a higher Return on Equity going forward and to provide shareholders with a more pure-play investment opportunity in our business,” said Ken McBride, president and CEO. “The special dividend is a testament to our strong free cash flow generation and continues our demonstrated history of returning excess cash to our shareholders.”

Including this special dividend, will now have returned approximately $252 million to its shareholders since 2002. Including a $78 million special dividend paid in 2004, and the current special dividend of $28.5 million, total special dividends now represent approximately $106 million. In addition, since 2002, the Company has spent approximately $146 million repurchasing its shares. Through its share repurchases has reduced its current split-adjusted total shares outstanding by approximately 45% compared to the total shares outstanding at the beginning of 2002.

About and PhotoStamps (Nasdaq: STMP) is a leading provider of Internet-based postage services.’s service enables small businesses, enterprises, advanced shippers, and consumers to print U.S. Postal Service-approved postage with just a PC, printer and Internet connection, right from their home or office. The Company currently has PC Postage partnerships with Avery Dennison, Microsoft, HP, Office Depot, the U.S. Postal Service and others.

PhotoStamps is a patented product that couples the technology of PC Postage with the simplicity of a web-based image upload and order process. Customers may create full custom PhotoStamps with their own digital photograph, or they may choose a licensed image from one of many PhotoStamps collections such as the collegiate collection. Since launching PhotoStamps in May 2005, more than 82 million individual PhotoStamps have been shipped to customers. currently has PhotoStamps partnerships with Apple, Google/Picassa, HP/Snapfish, Adobe and others.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements that involve risks and uncertainties. Important factors, including the Company’s ability to complete and ship its products, maintain desirable economics for its products and obtain or maintain 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 year ended December 31, 2009, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. STAMPS.COM undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events., the logo and PhotoStamps are trademarks or registered trademarks of Inc. All other brands and names are property of their respective owners. Investor Contact: Investor Relations
(310) 482-5830

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