Every year the Internet continues to expand and develop its mainstay role in the American culture and economy. The impact of the Internet has transformed communication and business processes and created opportunities for all organizations, including the Postal Service, to improve efficiencies, enhance relationships, and develop new products and services. In 2003, the Postal Service continued to utilize this technology to provide products and services that meet the varied needs of its business and consumer customers.

     The Postal Service's award-winning Web site, usps.com, has become a vital channel, streamlining customer access to core postal products, services, and information. The continued growth of online revenue transactions, other indirect usps.com revenue transactions, and cost avoidance transactions have driven the total channel value to an estimated at $399 million in 2003 - an increase of 79 percent over 2002.

     Much of the success is attributed to the launch of usps.com version 2.7 in January 2003. This effort targeted customer needs for more small-business related content and easier access to tools and applications. Additionally, value was achieved by leveraging technologies to streamline transactions that made it easier for customers to purchase goods and services.

     This year's efforts also focused on improving the online customer experience, which resulted in increased online traffic and customer satisfaction. The Web site received 175 million visits in 2003, an increase of 38

percent over 2002. The Internet channel achieved an overall customer satisfaction rating that surpassed the industry benchmark of 72 percent. Also, usps.com was ranked number one by Washington-based consulting firm Customer Respect Group in an analysis that measured the customer experience when interacting with companies over the Internet for transportation, distribution, and logistics firms in the United States.

     The Postal Service's postage technology initiatives focus on extending easy, costeffective access to postage and leveraging private sector partnerships for innovations to cut costs and enhance value. Leveraging commercially-developed innovations reduces or eliminates Postal Service capital investment and provides opportunities for cost savings, cost avoidance, revenue generation, and mail security. Further, the innovations of Internet postage and the information based indicia (IBI) provide the technology platform for Intelligent Mail service and opportunities to enhance the value of mail and move toward a digital network.

     During 2003, the Postal Service received or continued review of 38 concepts for new meters and PC Postage software solutions. Significant among these are concepts involving further expansion of postage payment integration with online auctions and Webbased shipping solutions. Of those concepts, 25 products were formally submitted for evaluation by the various commercial providers of which 18 have currently been approved for national distribution.

     Package shipping customers asked specifically for a way to pay for postage conveniently without printing the postage amount directly onto the shipping label. In response, the POSTAGE PAID IBI was introduced in 2003 by two PC Postage providers. The label provides the solution by allowing customers to print a postage-paid shipping label with the postage amount embedded in the barcode. This feature contributed to the