Melbourne IT
Encyclopedia
Melbourne IT is an Australian Internet company listed on the Australian Securities 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 and online marketing 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 IDR Management Services, based in London. Melbourne IT currently operates eighteen main global offices, including an office in the Washington, DC area and Mountain View, California.
For historical reasons (outlined below) Melbourne IT had a de facto monopoly on com.au domain name registrations for several years, providing more than half of its revenues until April 1999 when ICANN
awarded it one of the first five registrar licenses to compete with Network Solutions Inc in registering domain names under .com, .net and .org. From December 1999, when Melbourne IT listed on the ASX, the registration of international domain names has dominated its revenues. Internationally, as an ICANN-accredited registrar, Melbourne IT is ranked around 5 in the world, making the company the largest Australian domain name registrar.
The company has attempted to diversify its revenue 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. In 2008, Melbourne IT acquired Verisign DBMS for US$50m.
’s new commercial subsidiary Melbourne Information Technology International Pty Ltd, which commenced operations from 1 May 1996. Professor Iain Morrison was appointed the third foundation director of the company. The company chose to trade under the business name of Melbourne IT from its earliest days.
Contrary to popular mythology, the company was not set up to trade in domain names. The company’s charter was to demonstrate the University’s strategic leadership in working with industry and government in selected areas of IT. Its first and continuingly profitable business, up until its float on the ASX
in December 1999, was its joint venture ASAC (Advanced Services Applications Centre) with Ericsson Australia. ASAC was set up to develop applications with synergies between the Internet and advanced telecommunications, particularly mobile products. ASAC was recognized by Ericsson as one of its Global Design Centres in 1997, and contributed $0.5 million dollars in profit to Melbourne IT in the year before its float. ASAC was incorporated as an independent joint venture in December 2000, but became a casualty of Ericsson’s downsizing of its global R&D following the bursting of the Dot-com bubble
in July 2000.
On 21 June 1996 a front-page article in the The Australian Financial Review
by Charles Wright drew attention to the parlous state of commercial domain name registration in Australia, where a large backlog of Australian businesses were waiting for processing of their applications for com.au domain names by the part-time domain name administrator, Robert Elz
, senior system administrator in the University of Melbourne’s Computer Science Department, who declined to communicate with the media.
Robert Elz had been assigned the role of administrator of the .au top-level domain by Jon Postel
since 1989, an arrangement that worked quite satisfactorily through the early 1990s when the Internet was largely of interest only to tertiary educational and research institutions. The AFR article caused Melbourne University to be aware of the possible commercial value of the rights to assign domain names, but also of the damage to the University’s reputation if the registration of com.au domain names was not transferred to a competent commercial organization. The Head of the Computer Science Department persuaded Mr Elz to transfer the administration of com.au names to the University’s subsidiary Melbourne IT, which he did by way of a non-exclusive licence, to be reviewed after five years. Melbourne IT was awarded a grant of $100,000 by the Government of Victoria in 1996 in return for registering the backlog of over 2,000 com.au applications free to the applicants, and used this money to build its first domain name registration software platform.
From October 1996 Melbourne IT began pricing its services by charging for new and renewed com.au names at 10% below the market rate set by Network Solutions
for the popular .com names, and was the first domain name registrar worldwide to introduce trademark checking and money-back service assurance guarantees. It also introduced three-tiered pricing for different levels of turnaround time, during the first two years 1997-98 before eligibility decisions were sped up by online access to the Australian trademarks database and to registries of Australian business names and gazetted geographical names. Melbourne IT also moved to align Robert Elz’s rather idiosyncratic eligibility criteria (e.g., ‘no name should in principle be registered if found in an English dictionary’; but exceptions had been made to this before 1996 such as news.com.au and travel.com.au, which annoyed other applicants) to the rules for registering business names in Australia.
In April 1999 Melbourne IT was selected by ICANN to be one for the first five registrars to register .com, .net and .org names in competition with the incumbent Network Solutions. Entry into the international domain name market from July 1999 greatly increased the company’s revenues and market value, and caused the University to prepare the company for an Initial Public Offering
. On 14 December 1999 Melbourne IT was floated on the ASX, near the height of the dot-com bubble
.
It benefited from a cover story by finance journalist Ivor Rees in a weekend edition of the Australian Financial Review in November 1999, describing it presciently as the ‘Hottest Float of the Year’. Interest in the shares was particularly strong because it was the only Australian tech stock floating that year with a track record of actual profitability. Demands for a prospectus were so high that complaints were aired in the media by members of the public unable to obtain one. The chief beneficiaries of the float, apart from the University, were the clients of the underwriters, JB Were and CommSec
, some of whom made massive stag profits when the stock peaked at $8.20 on the day of its float, compared with the IPO price of $2.20. In 2000 the Victorian Auditor-General held an investigation into whether the stock was undervalued by the underwriters when listed, but concluded that the float had been carried out properly.
The University of Melbourne received a gross benefit of $93.5 million through selling 85% of its equity in the float, as well as a pre-float dividend of $1 million, but left the company with $7.5 million as working capital
. The stock held up above $8 for four months following the dot-com bubble of April 2000, peaking briefly to $17 in February, but sank to $5.99 after the company released a realistic market outlook on 23 August 2000.
During January to August 2000 the founding CEO Peter Gerrand founded subsidiaries in the USA and Europe http://www.inww.es/, and participated in the creation of auDA
as the national domain name industry self-regulator. On 14 September he announced he would leave the company on September 30 for family reasons; after this announcement the stock sank by a further 10%. He was succeeded by his deputy Adrian Kloeden http://www.deakin.edu.au/council/members/council.php, and continued as a consultant to the company until after the hosting of ICANN’s meeting in Melbourne in March 2001. Adrian Kloeden was succeeded as CEO by Theo Hnarakis in November 2002 http://corporate.melbourneit.com.au/news/newsstory.php?id=114.
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. Founded in 1997, WCG have 2 data centres in Brisbane, one at Wickham Street, Fortitude Valley, and another in Spring Hill
at a PIPE Networks
facility. Staff from Webcentral's Brisbane office also manage a large colocation area in an Equinix
datacenter in Mascot, New South Wales
.
Dr Bruce Tonkin http://www.icann.org/biog/tonkin.htm, who joined Melbourne IT in 1999 as Chief Technology Officer, was elected convenor of ICANN’s important GNSO (Generic Names Support Organization)http://gnso.icann.org/ constituency from June 2004 to June 2007, and will serve on the ICANN Boards as the GNSO’s elected representative from May 2008.
On 30 April 2008 Melbourne IT announced it is going to purchase VeriSign
's Digital Brand Management Services for US$50m.
Australian Securities Exchange
The Australian Securities Exchange was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006. It is the primary stock exchange group in Australia....
. Formed in 1996, its primary business is domain name
Domain name
A domain name is an identification string that defines a realm of administrative autonomy, authority, or control in the Internet. Domain names are formed by the rules and procedures of the Domain Name System ....
registration in most of the major national and global top-level domains
Domain name
A domain name is an identification string that defines a realm of administrative autonomy, authority, or control in the Internet. Domain names are formed by the rules and procedures of the Domain Name System ....
. It also offers web and email hosting services and online marketing 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
Earnings before interest and taxes
In accounting and finance, earnings before interest and taxes is a measure of a firm's profit that excludes interest and income tax expenses. Operating income is the difference between operating revenues and operating expenses...
) 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 IDR Management Services, based in London. Melbourne IT currently operates eighteen main global offices, including an office in the Washington, DC area and Mountain View, California.
For historical reasons (outlined below) Melbourne IT had a de facto monopoly on com.au domain name registrations for several years, providing more than half of its revenues until April 1999 when ICANN
ICANN
The Internet Corporation for Assigned Names and Numbers is a non-profit corporation headquartered in Marina del Rey, California, United States, that was created on September 18, 1998, and incorporated on September 30, 1998 to oversee a number of Internet-related tasks previously performed directly...
awarded it one of the first five registrar licenses to compete with Network Solutions Inc in registering domain names under .com, .net and .org. From December 1999, when Melbourne IT listed on the ASX, the registration of international domain names has dominated its revenues. Internationally, as an ICANN-accredited registrar, Melbourne IT is ranked around 5 in the world, making the company the largest Australian domain name registrar.
The company has attempted to diversify its revenue 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. In 2008, Melbourne IT acquired Verisign DBMS for US$50m.
History
Melbourne IT's history dates back to April 1996 when Eugene Falk AM OBE and Professor Peter Gerrand were appointed as Chairman and CEO, respectively, for the University of MelbourneUniversity of Melbourne
The University of Melbourne is a public university located in Melbourne, Victoria. Founded in 1853, it is the second oldest university in Australia and the oldest in Victoria...
’s new commercial subsidiary Melbourne Information Technology International Pty Ltd, which commenced operations from 1 May 1996. Professor Iain Morrison was appointed the third foundation director of the company. The company chose to trade under the business name of Melbourne IT from its earliest days.
Contrary to popular mythology, the company was not set up to trade in domain names. The company’s charter was to demonstrate the University’s strategic leadership in working with industry and government in selected areas of IT. Its first and continuingly profitable business, up until its float on the ASX
ASX
ASX may refer to:* Australian Securities Exchange, the primary stock exchange of Australia* Advanced Stream Redirector, a computer file format listing Windows Media files * Armstrong Siddeley ASX, a British experimental turbojet* John F...
in December 1999, was its joint venture ASAC (Advanced Services Applications Centre) with Ericsson Australia. ASAC was set up to develop applications with synergies between the Internet and advanced telecommunications, particularly mobile products. ASAC was recognized by Ericsson as one of its Global Design Centres in 1997, and contributed $0.5 million dollars in profit to Melbourne IT in the year before its float. ASAC was incorporated as an independent joint venture in December 2000, but became a casualty of Ericsson’s downsizing of its global R&D following the bursting of the Dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
in July 2000.
On 21 June 1996 a front-page article in the The Australian Financial Review
The Australian Financial Review
The Australian Financial Review is a leading business and finance newspaper in Australia.Fairfax Media publishes it in a compact format six days a week, Monday to Saturday....
by Charles Wright drew attention to the parlous state of commercial domain name registration in Australia, where a large backlog of Australian businesses were waiting for processing of their applications for com.au domain names by the part-time domain name administrator, Robert Elz
Kevin Robert Elz
Kevin Robert Elz, often referred to in computing circles as Robert Elz, or simply kre, is a computer programmer and a pioneer in connecting Australia to the Internet, and more recently, in connecting Thailand.-Career:...
, senior system administrator in the University of Melbourne’s Computer Science Department, who declined to communicate with the media.
Robert Elz had been assigned the role of administrator of the .au top-level domain by Jon Postel
Jon Postel
Jonathan Bruce Postel was an American computer scientist who made many significant contributions to the development of the Internet, particularly with respect to standards...
since 1989, an arrangement that worked quite satisfactorily through the early 1990s when the Internet was largely of interest only to tertiary educational and research institutions. The AFR article caused Melbourne University to be aware of the possible commercial value of the rights to assign domain names, but also of the damage to the University’s reputation if the registration of com.au domain names was not transferred to a competent commercial organization. The Head of the Computer Science Department persuaded Mr Elz to transfer the administration of com.au names to the University’s subsidiary Melbourne IT, which he did by way of a non-exclusive licence, to be reviewed after five years. Melbourne IT was awarded a grant of $100,000 by the Government of Victoria in 1996 in return for registering the backlog of over 2,000 com.au applications free to the applicants, and used this money to build its first domain name registration software platform.
From October 1996 Melbourne IT began pricing its services by charging for new and renewed com.au names at 10% below the market rate set by Network Solutions
Network Solutions
Network Solutions, LLC is a technology company founded in 1979. The domain name registration business has become the most important division of the company. As of January 2009, Network Solutions managed more than 6.6 million domain names.-History:...
for the popular .com names, and was the first domain name registrar worldwide to introduce trademark checking and money-back service assurance guarantees. It also introduced three-tiered pricing for different levels of turnaround time, during the first two years 1997-98 before eligibility decisions were sped up by online access to the Australian trademarks database and to registries of Australian business names and gazetted geographical names. Melbourne IT also moved to align Robert Elz’s rather idiosyncratic eligibility criteria (e.g., ‘no name should in principle be registered if found in an English dictionary’; but exceptions had been made to this before 1996 such as news.com.au and travel.com.au, which annoyed other applicants) to the rules for registering business names in Australia.
In April 1999 Melbourne IT was selected by ICANN to be one for the first five registrars to register .com, .net and .org names in competition with the incumbent Network Solutions. Entry into the international domain name market from July 1999 greatly increased the company’s revenues and market value, and caused the University to prepare the company for an Initial Public Offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
. On 14 December 1999 Melbourne IT was floated on the ASX, near the height of the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
.
It benefited from a cover story by finance journalist Ivor Rees in a weekend edition of the Australian Financial Review in November 1999, describing it presciently as the ‘Hottest Float of the Year’. Interest in the shares was particularly strong because it was the only Australian tech stock floating that year with a track record of actual profitability. Demands for a prospectus were so high that complaints were aired in the media by members of the public unable to obtain one. The chief beneficiaries of the float, apart from the University, were the clients of the underwriters, JB Were and CommSec
Commonwealth Securities
Commonwealth Securities, also known as CommSec or ComSec, is Australia's largest discount stockbroking firm operated by the Commonwealth Bank of Australia, one of Australia's top four banks....
, some of whom made massive stag profits when the stock peaked at $8.20 on the day of its float, compared with the IPO price of $2.20. In 2000 the Victorian Auditor-General held an investigation into whether the stock was undervalued by the underwriters when listed, but concluded that the float had been carried out properly.
The University of Melbourne received a gross benefit of $93.5 million through selling 85% of its equity in the float, as well as a pre-float dividend of $1 million, but left the company with $7.5 million as working capital
Working capital
Working capital is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Net working capital is...
. The stock held up above $8 for four months following the dot-com bubble of April 2000, peaking briefly to $17 in February, but sank to $5.99 after the company released a realistic market outlook on 23 August 2000.
During January to August 2000 the founding CEO Peter Gerrand founded subsidiaries in the USA and Europe http://www.inww.es/, and participated in the creation of auDA
.au Domain Administration
.au Domain Administration is the manager of the .au domain, which is the country-code top-level domain for Australia. It is a not-for-profit organisation, whose membership is open to organisations or individuals who have an interest in Australian domain name matters.-Early History of .au:The...
as the national domain name industry self-regulator. On 14 September he announced he would leave the company on September 30 for family reasons; after this announcement the stock sank by a further 10%. He was succeeded by his deputy Adrian Kloeden http://www.deakin.edu.au/council/members/council.php, and continued as a consultant to the company until after the hosting of ICANN’s meeting in Melbourne in March 2001. Adrian Kloeden was succeeded as CEO by Theo Hnarakis in November 2002 http://corporate.melbourneit.com.au/news/newsstory.php?id=114.
In September 2006, Melbourne IT acquired the Australian Internet hosting company, WebCentral Group (ASX:WCG) via a scheme of arrangement
Scheme of arrangement
A scheme of arrangement is a court-approved agreement between a company and its shareholders or creditors...
and delisted the WebCentral group from the ASX. Founded in 1997, WCG have 2 data centres in Brisbane, one at Wickham Street, Fortitude Valley, and another in Spring Hill
Spring Hill
-Australia:*Spring Hill, New South Wales , a small town near the city of Orange*Spring Hill, Queensland, a suburb of Brisbane*Spring Hill, New South Wales , a suburb of Wollongong, New South Wales-United States:* Spring Hill, California...
at a PIPE Networks
PIPE Networks
PIPE Networks is an Australian company, based in Brisbane, Queensland, primarily involved in setting up peering exchanges. PIPE itself stands for "Public Internet Peering Exchange"...
facility. Staff from Webcentral's Brisbane office also manage a large colocation area in an Equinix
Equinix
Equinix, Inc. is an American public corporation that provides carrier-neutral data centers and internet exchanges. Equinix provides network-neutral data centers and interconnection services...
datacenter in Mascot, New South Wales
Mascot, New South Wales
Mascot is a suburb in south-eastern Sydney, in the state of New South Wales, Australia. Mascot is located 7 kilometres south of the Sydney central business district and is the administrative centre of the City of Botany Bay...
.
Dr Bruce Tonkin http://www.icann.org/biog/tonkin.htm, who joined Melbourne IT in 1999 as Chief Technology Officer, was elected convenor of ICANN’s important GNSO (Generic Names Support Organization)http://gnso.icann.org/ constituency from June 2004 to June 2007, and will serve on the ICANN Boards as the GNSO’s elected representative from May 2008.
On 30 April 2008 Melbourne IT announced it is going to purchase VeriSign
VeriSign
Verisign, Inc. is an American company based in Dulles, Virginia that operates a diverse array of network infrastructure, including two of the Internet's thirteen root nameservers, the authoritative registry for the .com, .net, and .name generic top-level domains and the .cc and .tv country-code...
's Digital Brand Management Services for US$50m.
External links
- Melbourne IT
- Corporate site
- Web Central
- Melbourne University press release on Melbourne IT float
- summary (and link to transcript) of Four Corners documentary on the Melbourne IT float
- Origins and Nature of the Internet in Australia by Roger Clarke