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 [IMAGE] Dow Jones [IMAGE] 9840.08 + 44.01  8:08 am EST, Sun., January 27, 2002  [IMAGE] NASDAQ [IMAGE]  1937.70 - 4.88  For info, visit www.smallcapnetwork.net  .  [IMAGE] S & P 500 [IMAGE] 1133.28 + 1.13  To be removed, please click here  .  [IMAGE] Russell 2000 [IMAGE]   479.35 - 0.38  VOLUME 02: ISSUE 8 	
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 When Hell Freezes Over   That was the overwhelming reply from experts when asked when Amazon.com (AMZN ) will show a profit.  This past Wednesday the company reported $1.12 billion in sales during the last three months of 2001, a 15 percent increase over the $972 million recorded in the same period a year earlier. International sales grew an impressive 81 percent.   [IMAGE]The biggest surprise was that earnings came in at $5 million, or a penny per share.  Who said pennies were obsolete? That one penny of profit per share helped push the company up over 42% for the week.  Could this be the beginning of the internet renaissance?  Has the time come for internet companies to show the world that they are real companies with business models that can make money? Well, we won't go that far.   The past two years has been dismal for internet land. Thousands of internet companies sunk faster than the Titanic.  Famous flameouts such as Pets.com, Webvan and eToys became the butts of every dotcom joke.  When Jay Leno makes fun of internet companies than you know things are really bad.  However, at some point the laws of Darwin were bound to take over the internet sector.   A look at today's stock market shows just a few dotcoms.  Some will inevitably burn through the remaining cash that was raised during the happy go lucky IPO period.  Others will be acquired or just perish.  What people maybe missing is that there will be survivors that make it.  Some will actually thrive and develop into very strong companies.  Ultimately, the internet has made life more convenient for the masses. The challenge is to make this convenience into something people will pay for.   So who will be the survivors?  There are approximately total 65 companies with a .com still in their names that are trading in the major indexes (NYSE, AMEX, NASDAQ).  One of the most promising dotcoms is once high flier Stamps.com (STMP ). [IMAGE]  If you don't know already, the company allows people to print postage from their printer.  All you need is a PC, an internet connection and a free downloadable software program.  Stamps.com makes money by charging a monthly recurring "convenience fee". The service launched in October of 1999 and currently they about 300,000 clients.   The company is currently trading near its 52-week high at $4.25 but far from the $90 per share it once traded at.  Stamps.com's market capitalization is at a very rich $215 million dollars but with over $194 million in cash and cash equivalents the valuation is justified.    CEO Ken McBride who was the former CFO, took over the top spot in August 2001.  He has been with the company since its pre IPO days.  Once Ken became the new CEO, the first thing he did was to cut costs across the broad.  Capital preservation was the only way for the company to survive long term.  The monthly burn rate was reduced from a loss of $11 million per month to a break even business by the end of 2001.   Going forward, Stamps.com has a product code named Net-Stamps that is in beta trial with the U.S. Postal Service.  If this product is approved then users can print generic sheets of stamps right off of their printers. Net-Stamps should help the company boost the number of customers because the current Internet postage software is designed more for heavy users.  For some customers it is inconvenient to get online and purchase postage every time postage is needed if the volume is minimal.   The recent Anthrax scare has increased interest in the company by government agencies. The Internet postage has a unique digital signature on each piece of mail that is traceable to the sender.  A push by the USPS for Internet postage would be an enormous catalyst for the company.   One of the biggest potential clients for Stamps.com could be the direct mail industry.  The general public is much more reluctant to open any mail that is unsolicited.  However, if the Internet postage became a seal of quality or assurance it could help the industry tremendously.   There are other players in the industry but over 80% of the market is dominated by Stamps.com.  The company has a boat load of cash and expects to achieve profitability the first quarter of 2002.   The company has done an excellent in executing initiatives that will guarantee its survival.  Although Wall Street no longer follows the company, people are beginning to take notice of Stamps.com.  If the company is able to achieve profitability this quarter then we can officially induct it into the dotcom Hall Of Fame. 	
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