Melbourne IT

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Melbourne IT is an Australian internet company listed on the Australian Stock Exchange. Formed in 1996, its primary business is domain name registration in most of the major national and global top-level domains. It also offers web and email hosting services.

The company is a profit-earning medium-sized (in the Australian context) internet business, with 2004 earnings of approximately 4.5 million AUD (EBIT) on revenues of about 60 million AUD, and continues to grow steadily. It has operations in several European countries through the acquisition of Cogent, as well as a San Francisco office.

For historical reasons (outlined below) Melbourne IT had a monopoly on .au domain name registrations for several years, providing almost 100% of its revenues. Following deregulation in 2002, Melbourne IT lost its number one ranking as a .au domain name registrar to lower-priced rivals, although it maintains a significant market share. Internationally, as an ICANN-accredited registrar, Melbourne IT is ranked around 5 in the world[1].

The company has attempted to diversify its reveue sources to reduce its dependence on domain names, introducing managed hosting products and consulting services. In 2006, Melbourne IT acquired WebCentral, Australia's largest web hosting company.

[edit] History

Melbourne IT's history dates back to 1989 when the University of Melbourne, an institution with a very long history of computing research dating back to CSIRAC in the mid-1950s, was the first Australian organization to be connected to the Internet. The Computer Science department's senior system administrator (and notable BSD Unix developer) Robert Elz was placed in charge of the .au top-level domain, an arrangement that worked quite satisfactorily through the early 1990s when the internet was of interest only to a few educational and research institutions.

When interest in the Internet exploded outside academia in about 1994, Elz found himself swamped with businesses seeking registration. Domain name registration was not his primary work responsibility, and Elz was famously uninterested in business. Delays in registration times grew to months. This caused considerable consternation in the business community, and the federal government eventually became involved. Melbourne University also began to be aware of the possible commercial value of the rights to assign domain names, particularly in the .com.au second-level domain. After protracted negotiations, a startup company, Melbourne IT, was formed, and was listed right in the middle of the dot-com bubble.

Melbourne IT enjoyed a monopoly on the registration of .com.au domain names for several years. Later, it made a spectacular debut on the stock market, with a number of well-connected investors allocated shares in the Initial Public Offering making massive stag profits. Interest in the shares was particularly strong because of the paucity of high-tech companies on a market dominated by banks and mining companies; web editor software company Sausage Software was another company caught up in the bubble. There were even investigations into whether the stock was deliberately undervalued by the underwriters when listed.

Melbourne University itself was quite content with its huge windfall of $130 million. But in the immediate aftermath of the float the stock declined, as predicted publicly by at least one member of the computer science department, and completely crashed in 2001, reflecting the actual revenues and profits and a more realistic outlook for the company.

In September 2006, Melbourne IT acquired the Australian Internet hosting company, WebCentral Group (ASX:WCG) via a scheme of arrangement and delisted the WebCentral group from the ASX.