Melbourne IT Quadruples Earnings

[Sydney, AUSTRALIA] Melbourne IT today reported an
EBIT of $3 million (US$1.8 million) for the half year ended 30 June 2000, an
increase of 435 percent over the corresponding period last year. Net profit
after tax was $2.2 million (US $1.3 million).

Revenue of $23.1 million for the half year is up 401 percent and already
nearing the prospectus forecast for the full year of $24 million.

The performance in domain name registrations, over which Melbourne
IT holds a monopoly, was described as “solid”. Melbourne IT said the
highlight of its results was the performance of its Internet Names Worldwide
division which registered over 800,000 global top level domain names (gTLD’s
– .com, .org and .net) during the six months, its market share increasing
from 6 percent in the March quarter to 8 percent in the June quarter.

Chief Executive Officer of Melbourne IT, Professor Peter Gerrand said the
company was concentrating its global marketing in those areas where
customers are prepared to pay extra for service and technical features, but
that retail and wholesale prices continue to be pushed down due to global
pricing pressures. He conceded that the total volume of gTLD registrations
was also falling, predicting the number of gTLD registrations to be
significantly lower this quarter.

The company is responding to the increased price pressure by placing
a tight rein on expenses in the short term and attempting to diversify its
business through opening up new market sectors such as chinese character
domains; developing registration capabilities in other country codes where
price competition is less intense; and bidding for a position as the
co-operator of a registry in the new top level domains which ICANN has
announced will come into operation in 2001. Melbourne IT also plans to move
into the sale of additional e-commerce products such as digital
certificates. It has established a joint venture with Ericsson to develop
secure mobile e-commerce products for the global market.

Addressing the issue of competition in registering domains, due to
be introduced imminently, Gerand said “we are confident that the policy
framework that introduces competition will extend to 90% of the .au space,
and will vastly increase the overall market in .au domain names that we will

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