Melbourne IT profit up, but domain name numbers down
Profits were up, but domain name sales down at ASX listed Melbourne IT (ASX Code:MLB).
But despite a challenging first half, and continued difficult conditions the company is forecasting another year of double digit revenue growth according to CEO Theo Hnarakis.
In a presentation accompanying the release of the company’s financial results this week, Hnarakis said Melbourne IT had seen a slowdown in business demand in the final quarter of last year.
The slowdown had affected all areas of its business and, moreover, the slowdown had continued in the first few months of 2009.
“These are sobering times and we are not immune from volatility in world markets…” said Hnarakis.
Australian investors responded harshly to the results, immediately marking the company’s share price down around 10%.
Of course, Melbourne IT, which claims to be one of the world’s top 5 domain name registrars, and one of the world’s top ten web-hosting companies, has had other bad news recently weighing on its share price.
An extended service outage at the company’s web-hosting subsidiary, WebCentral, for example, caused considerable angst and anger amongst many of the company’s customers.
Hnarakis blamed the failure of IBM hardware for the outage, which saw customer’s web-sites off-line and email access lost for 3 days and more.
Hackers too, have recently been causing trouble for the company, both at Melbourne IT’s New Zealand domain names business - Domainz – and also at a Portugese subsidiary.
But it is the slowdown in the company’s domain name business that has attracted most comment.
Total domains under management at Melbourne IT plateaued last year, and the numbers have since gone backwards. (Although with more than 5.5 million names under management the numbers are still very large.)
According to Hnarakis the company’s fortunes have simply mirrored general trends in the market with Verisign reporting that global demand for domain names for the first quarter of 2009 was up only 9% on the same quarter in the previous year.
Melbourne IT’s experience seems to be that demand for global TLD’s (ie. dot.com) had dropped off more sharply than demand for names registered under particular country codes.
However the latest figures from AusRegistry suggest that demand for Australian domain names has dropped off considerably, with increasing numbers choosing not to renew their names.
New dot.com.au registrations in February were down nearly 15% on the same month last year, whilst drop-offs were up by nearly 30%.
March saw a return to growth in new dot.com.au domain registrations but drop-offs jumped dramatically to some 15,000 in the month, up more than 50% on March last year.
Of course, Melbourne IT earns much, if not most of its revenues in other areas today, and so it’s fortune are not as closely aligned with those of the domain name market as they have been traditionally.
For more information go to
http://corporate.melbourneit.com.au
www.ausregistry.com.au
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