Melbourne IT buys NZ domain incumbent - News - Business

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This story was printed from ZDNet Australia.
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Melbourne IT buys NZ domain incumbent

By James Pearce, ZDNet Australia
August 21, 2003
URL: http://www.zdnet.com.au/news/business/soa/Melbourne-IT-buys-NZ-domain-incumbent/0,139023166,120277573,00.htm

Melbourne IT has purchased the New Zealand incumbent domain name registrar, Domainz, for NZ$2 million (AU$1.8 million).

In December last year InternetNZ, which runs the domain name system in New Zealand, restructured the incumbent registrar -- Domainz -- creating .nz Registry Services to act as the registry (which keeps a record of domain name information) and transforming Domainz into a retail registrar (which sells domain name licences). In May this year, Domainz was advertised for sale, as InternetNZ did not feel it was appropriate for the administrator to own a retail registrar.

After a luke-warm response to the sale from the domain name industry, Melbourne IT succeeded in buying its New Zealand counterpart, and will take over the business in September. Melbourne IT used surplus operating cash generated in the first half of 2003 to buy Domainz for AU$1.8 million, and noted that the New Zealand company had surplus cash reserves in excess of AU$500,000.

"We see this business as an ideal fit with ours," said Melbourne IT's chief executive officer, Theo Hnarakis. "It is the market leader in domain names in New Zealand with more than 40,000 names under management and generates approximately AU$3 million per annum in sales."

"The Domainz acquisition meets all our strict criteria -- positive cash flow in the first year following acquisition, ability to contribute immediately to earnings, highly valued brand, experienced and talented staff, strong market position and good synergies with our existing business," he said.

Many in the domain name industry will agree that the two companies are an ideal fit, with both being an incumbent domain name supplier suddenly faced with competition.

The President of InternetNZ, Keith Davidson, said the top four bids were close enough to make the final selection a complex process. -We considered issues such as impact on staff, ability to add value to the .nz market, future stability, amongst others," he said.