IT to seek funds over domain name bids
the fallen angel of the internet domain names world, signalled on Sunday that it
would ask the market for a cash injection if its quest for registry rights over new
top-level domain names succeeded.
A spokesman said: "We'll be looking at some capital-raising
options in the coming weeks, but that's dependent on our being successful." He did
not say how much the company would seek.
Melbourne IT's bids to operate the proposed
new names .per and .biz jointly with NeuStar, the North American telephone numbering
plan administrator, got a boost on Friday with positive reports from Icann, the international
domain names body, in the first stage of assessment. Melbourne IT and NeuStar have
formed a joint venture, JVTeam.
While speaking in glowing terms of the JVTeam's
market analysis and technical prowess, however, Icann was concerned about the heavy
upfront losses foreshadowed in the .biz registry business, which it said could result
in liquidity issues.
JVTeam, 45 per cent owned by Melbourne IT and 55 per cent
by NeuStar, planned to invest $US72.5 million ($140 million) in the .biz registry,
for a cumulative net loss of $US89 million over the first four years, Icann said.
bids are being described by analysts as "make or break" for Melbourne IT because
profits in the existing .com, .net and .org business have evaporated. Macquarie Bank
valued the existing business last month at 93¢ a share, and the same business with
a .per registry at $3.24. The shares closed at $1.95 on Friday, less than an eighth
of their March peak.
Icann said JVTeam's .biz application had "many strengths",
including a thorough assessment of the market, a well laid-out marketing plan and
plans to invest significant sums.
"The weakness in this plan involves large losses
forecast in the early periods. Should the losses continue beyond the firm's ability
to withstand, [it] would have liquidity issues. Overall, this application is a stronger
application in this category from a business perspective," it said.
The .per bid
is to invest $US40.5 million but this is not seen as a problem by Icann, which praises
JVTeam for another thoroughly researched and laid-out plan, concluding: "Overall,
this application is a solid application in this category from a business perspective."
drawback is the competition. JVTeam is one of four bidders for new personal domain
name extensions to get through the first stage.
The others are Geneva-based CORE
Internet Council of Registrars, a global co-op of domain name registrars, bidding
for .nom, Sarnoff Corporation of the US, bidding for .i, and The Global Name Registry
(.name, .nom, .san and .xing).
In JVTeam's favour, Icann indicated it may select
more than one of these bids.
A separate bid for .geo by ISR International, a Californian
research institute, for which JVTeam will provide back-office support, received an
But Melbourne IT is no longer involved in NeuStar's .web bid,
which had been expected to yield revenues of $US51 million by year four after burning
$US45 million of cash in the first three years.
I guess they want to blow more
investors money and to think the ICANN Staff report said they are financially worthy.
Your bias STINKS!