news iiNet chief executive Michael Malone has signalled plans to take a break of between three to six months from the business he founded in his garage some 20 years ago, with iiNet’s chief financial officer David Buckingham to step in as acting chief executive in his absense.
“We have had a fantastic year and the company is in great shape,” Malone told the company’s annual general meeting yesterday. “We have acquired three businesses in the past two years, further improved customer service levels, returned to positive organic growth, and had significant success in expanding our product suite.”
“I am confident that our potential for solid earnings growth is as good as it has ever been. The board and management are preparing for where the business needs to go in the next ten years, collecting and evaluating the many strategic options, a project that has around 18 months to run. I founded this company 20 years ago and have never taken a substantial break. I feel that this is a good time for me to recharge, re-energise and prepare for the next big round of growth. I am planning to take a 3-6 month break to get ready for what’s next.”
Malone said he was “very proud” of the strength and depth of iiNet’s senior leadership team and was confident of its ability to continue to run and grow iiNet in his absence.
“As many of you know I have a love of travel, trekking and climbing mountains and I plan to tackle some new peaks during this time,” the executive told the company’s shareholders. “I am excited by the opportunity of recharging and then tackling new challenges at iiNet on my return. Of course I have a considerable investment in this business in every sense. It will be strange not coming to iiNet each day for a while, but I am very excited by the future.”
iiNet chairman said everyone at the company wished Malone “the best on a well earned break”.
“As he has said we have a very capable leadership team. Indeed the opportunity to give our top people an opportunity to step up while the MD takes a break after 20 years is a good model, particularly when the business is in such good shape. Mr David Buckingham has been Chief Financial Officer for the past six years and is well known to our shareholders. In Michael’s absence, David will be Acting CEO, supported by the excellent iiNet senior leadership team.”
The news comes as there are also other management changes going on at iiNet at the board level.
Non-executive director Paul Broad, who joined iiNet’s board when his former company, PowerTel, made a significant investment back in 2006, will retire from the board due to other executive commitments, while Internode founder Simon Hackett, who joined the iiNet board when iiNet bought his company Internode at the end of 2011, will also step down, as he is joining the board of the National Broadband Network Company.
opinion/analysis
Has Michael Malone finally run out of steam? Back in 2011, I painted the iiNet founder as a Godfather-like figure with a voracious appetite for growing his concerns. He’s always kept a tight rein on the company he famously founded 20 years ago in his garage and has been loathe to let any part of it out of his control. At the time I wrote:
“Arguably, Malone has partly been able to bring iiNet to the point where it is today, number two in ADSL broadband in Australia and lighting a fire under Optus and Telstra, through the same two factors which took [Godfather Don Corleone] to the top. Like the Godfather himself, Malone came from humble roots; with its first steps being taken in a suburban garage in Perth in 1993. However, Malone and his growing team gave no quarter as they rapidly expanded the ISP; expanding their operations interstate and voraciously buying up every rival they could get their hands on.
Wantree, Omen, RuralNet, Tas Access, Granite Internet, RockNet, Hartindale, Country Netlink, Origin Internet, Froggy Internet, Virtual Communities, iHug, OzEmail, Netspace, AAPT, Westnet. These are just some of the names of rival ISPs which iiNet has swallowed up over the years, as Malone’s quest to dominate the Australian Internet has gained a full head of steam.”
Of course, more recently, we can also add TransACT and Internode to the list of Malone’s conquests. The iiNet leader has not been idle in buying out rivals since I wrote that article in 2011. So has this endless, driving energy come to an end? No, I don’t think so.
I’m not surprised that Malone is taking a few months off to step down from his main role. After all, there is not a huge amount of new things for the executive to get involved with at the company at this point. iiNet is growing organically and integrating its acquisitions, but that’s the boring stuff — what Malone really likes to get his teeth into is acquiring other companies. The problem is, there aren’t really many left which it would be possible to buy any more, due primarily to the iiBorg’s continual acquisition of most of its rivals over the past 20 years. What’s left is mainly optimisation.
From here I wouldn’t be surprised if ultimately Malone stepped back a little from the day to day running of his company to focus on other interests which might capture his attention in this lull period. 20 years is a long time to be doing one thing, after all — you have to suspect that with the ISP industry’s consolidation largely complete, Malone would be looking for a new challenge.
It’s possible that that that new challenge may come through the shift of the entire industry onto NBN infrastructure. But I also suspect Malone may take this chance to get involved with a number of other endeavours in other sectors. It will be interesting to find out what his plans will be when he comes back from his sabbatical. Malone is still a young man — I still hope to see more huge accomplishments from such a talented and energetic individual in future. Malone is the undisputed king of Australia’s ISP scene. I suspect he will now seek to apply his prodigious talents in other areas.
Image credit: iiNet
I suggest he will not return from his “sabbatical” and this is just a method of not making the shareholders nervous (despite the immediate dip in the share price when this announcement was made – his quitting would have made it much worse).
But, of course… this is just a theory.
IINET is being prepared for a merger with TPG.
Anyone for $5.00 bet?
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