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Sitting on domain names
Excuse my ignorance, but why?
zulu_dude




msg:3366192
 9:54 am on Jun 13, 2007 (gmt 0)

I'm quite keen on buying quality, generic domain names to develop. However, I've made numerous approaches to people who own good, generic domain names, with an offer to buy the domain name, only to be informed that it's not for sale. Not "it's too expensive for you", simply "it's not for sale".

Now, either these companies are in the same position as me and are wanting to develop the names in the future, or I'm approaching them in the wrong way, or they're sitting on them for some other reason that I can't fathom.

Any advice from more experienced domainers would be much appreciated!

 

oziman




msg:3366205
 10:18 am on Jun 13, 2007 (gmt 0)

domainers seem to believe that all type in traffic and PPC parking pages are more reliable then developing a site.

zulu_dude




msg:3366212
 10:28 am on Jun 13, 2007 (gmt 0)

Ok, I can completely understand that point of view and I think they are actually correct.

But what I can't understand is that if I were to offer them 10x their annual income from the domain (which I'm happy to do), then why would they not want to sell? Clearly I'm missing something here...

stever




msg:3366221
 10:41 am on Jun 13, 2007 (gmt 0)

Possibly with a finite resource because they think that at some point in the future their domains will be worth far more than a) what they paid, and/or b) what you are offering and, in the meantime, they provide a steady stream of income.

(And if you look at domainers like Frank Schilling they are starting to make noises about content generation.)

Webwork




msg:3366314
 1:05 pm on Jun 13, 2007 (gmt 0)

I acquired a number of domains anticipating a time when the cost of development and operation would drop and also when I'd have more time to attend to their development. I acquired what I called at the time "logical domain names" - which concept is now popularly known as "type-in domains" - and I acquired them for all the now obvious reasons including potential type-in traffic of generic domains, domain transparancy of purpose, reduced domain branding costs, and no-effort memorability of generic domains.

Just like I've got a garage full of woodworking tools, waiting for the day when I have more time to build something, I've got an account full of decent domain names waiting for the day when I have more time to build something on them. Pending that time I've got most of them parked and, if in the future I don't have all the time in the world to develop every one of them I can now turn to companies that offer - as a service - to build websites on decent domains.

Who would have figured?

I did, as well as many of my cohorts, because the business opportunity and business development/operations parallels between virtual real estate - domains - and real real estate were easy to discern for many folks, now collectively known as domainers. For example, just as there are landowners who lease their real property instead of selling it and there are real estate developers who will build buildings on land they lease - which buildings they then lease, these same models are now emerging online.

So far as people "sitting on domains" I have to say that in 2007 very few folks are "sitting on domains". To continue with the real estate analogy people "sitting on prime real estate" strike deals with vendors, allowing them to park their carts and hawk their wares on "prime undeveloped lots". Where? Mostly on high vehicular traffic highway corner lots, ones that show great mercantile promise by the volume of cars that pass by. To me those carts or vendors parked on the high traffic highway intersections are the equivalent of domain parking pages. Parking or smallish Adsense websites are just a stage in the development process. When the right moment or opportunity comes along a building will go up at the intersection just like a more robust website will be built. In that context the folks who disparage parked domains would be like folks who pass an undeveloped lot on a highway, one with a vendor's cart or a few billboards on it, and yell at the landowner "Hey, don't you know there's better things to do with this lot? I could do a better job than you're doing now!" I'm sure the clueless landowner will appreciate the insight and input, just about as much as the domain holder.

What's the point? The point is that you - the prospective domain buyer - need to reframe your thinking if you are going to succeed in interacting with domain holders. Really. If you harbor frustration or resentment it just won't work. Recontextualize. Respect the intelligence of the foresight or move on down the highway. You are not ready to negotiate.

Folks who hold decent domains today are themselves, more often than not, more interested in development than sale. Parking is just an interim measure. If they are ever going to sell it will likely be after a period of development - for fun, profit, self-expression, satisfaction of curiousity, and dozens of other reasons. Stop assuming that a parked domain means that it's for sale or held only for speculative purpose.

Generic type-in domain traffic has proven its value. The systems for delivering targeted advertisements to those domains has improved in the past few years. Therefore, the folks that hold domains now a) are better able fund their holdings, so they don't "need to sell" to you or anyone else to cover renewal costs; b) have a traffic/PPC data stream to prove the inherent value of their holdings, so they're less likely to sell; and, c) see that the world is waking up to the value of direct navigation, including the value of well qualified leads, and are therefore prepared to sit back to let that process - the awakening - firmly take hold. While the awakening takes place increased PPC bids for better domains/traffic and better appreciation in the marketplace for the "converted lead value" of that traffic (end-user buyers of that traffic are waking up) is the payoff - so there's no rush to accept the first offer that comes along.

For those of you who are frustrated by a lack of response to your "Is your domain Example.com for sale" emails there are many many reasons why you aren't getting a response and many of those reasons are quite rational - despite your belief that the first or foremost "rational response" would be to reply to your "Is Example.com for sale" email. My advice to the frustrated is to start by respecting the intelligence of the people with whom you are attempting to conduct business. Don't express any frustration. Don't make offers as if your offer demonstrates that you somehow "know better" than the current domain holder.

IF you really want to do business by email or phone then here's a winning formula: Decide what you are prepared to pay for the opportunity to build on a better domain, suck up your guts and send an email with a subject line that reads like this:"Offer of $$$,$$$ for Example.com" . . and keep your email body equally tight. IF the domain holder is vulnerable to money - if it's not an inseparable relationship - the approach I am suggesting that you use IS THE ONE best caculated to work.

How do I know this? Because I and most domain holders I know receive endless unsophisticated contacts or spam from people - most likely other domainers - hunting for knucklehead domain owners. Therefore, when it comes to receiving your well intentioned "Is your domain for sale" email, I and most domainers I know won't want to even begin to think about opening the email, much less replying, even much more less placing a value in response to your inquiry. In other words, given years of unproductive contacts, we think "Why waste the time?", forgetting that selling really isn't on our minds in the first place. And, if there are some domains in our portfolios that we might consider selling to fund other projects and when an email doesn't look like spam you - the prospective purchaser - are an unknown, including unknown as to your bona fides, including your ability to pay. So, you don't get past the filters we've set in our minds. Your email - as structured - suggests that you are simply the next clueless inquirer.

If you want to know what works it's quite simple: Make an offer, from the very outset, that makes economic sense to you, put a time limit on it, and then walk away, to go in search of any other target that interests you.

If you are a business operator don't use a gmail or hotmail address. It just doesn't work. We're not that stupid. Really. 99 out of 100 domainers - holding quality domains - will not be duped by the anonymous approach. Sophisticated domainers will more likely be put off by the action of using generic email addresses and also be put off by the assumption implicit in the hiding action. If you are BIG CORP or acting on behalf of BIG CORP please be grown up about doing business and use the corporate email address. Unless you are dealing with a knucklehead domainer the BIG CORP address only shows what are have the capacity to pay, not that you have the intent or willingness or stupidity to pay an inflated market price.

Really, folks, in the case of beter domains you need to get over the fear if you are even going to get down to the business of negotiating the purchase of a better domain from a sophisticated domainer.

And the longer you wait to get down to business the more sophisticated the sophisticated domainers are getting. Hopefully. ;)

[edited by: Webwork at 5:20 pm (utc) on June 14, 2007]

HuskyPup




msg:3366372
 2:04 pm on Jun 13, 2007 (gmt 0)

Excellent explanation Webwork:-)

As the owner of quite a few trade specific widget domain names I purchased many for a couple of reasons:

1. To eventually develop

2. To stop any potential competitor getting them!

With duplication issues a problem, all the domains I have not yet developed I have created my own generic widget informational index page with customised titlebars, metatags etc complete with AdSense yet with all on site links going to one of my core domains. In fact many people do not even realise that they've been transferred since to all intents and purposes it would appear they are still on the same site.

It works pretty well, the ads are on theme and the income more than pays for their annual renewal fees.

You really do need to stump up front what you think the name is worth to you, I have enquiries every week for my names and unless someone talks serious money, i.e. minimum USD 5 figures, then I'm not at all interested.

After all, if you can see the value in the name why do you possibly think the owner can not?

There is another side issue as well which is important to note.

These type-in domains are increasing in value and at present the taxman, certainly not in the UK, doesn't look at their probable increase in value.

I'll just leave it at that and to your imagination as to the financial advantages this could create:-)

zulu_dude




msg:3366434
 2:52 pm on Jun 13, 2007 (gmt 0)

Thanks for all the input. As I thought, it seems that most of them are in a similar position to me, in wanting to develop the domain names. Webwork, your point about them receiving many knucklehead offers would explain why they find it simpler to just say that the domain name isn't for sale.

Although I have obviously had a figure in mind when approaching owners, I've never voiced that. Generally, business logic says to not let on how much you're willing to pay... but I guess this is the internet and not all standard business rules apply.

It seems that my assumption that domainers hold onto domains simply to sell them in the future was completely incorrect! Mmmm. Why can't the English dictionary simply have more high-value words in it?

Webwork




msg:3366863
 10:44 pm on Jun 13, 2007 (gmt 0)

Generally, business logic says to not let on how much you're willing to pay... but I guess this is the internet and not all standard business rules apply.

It may be a common belief or even a common approach in certain business situations - such as buying a used car or a low to mid-market house - but as an approach to a more sophisticated "prospective seller" the approach would likely be received as being somewhere between "juvenile nonsense" and just plain offensive - like "Does this (?) really think I'm that () or that he's that ()"? More sophisticated players know their numbers, know their target operator, know whether that operator knows their numbers, etc.

Now, put this in context. In a domain transaction whom do you think is the more sophisticated operator: The person who snagged a domain in 1995, 1997, etc. or the person who is looking to buy it in 2007 but who can't name a price from the outset? In this context I'd suggest that you show some grasp of the situation . . and some respect, as it's the only approach reasonably calculated to work.

I was able to make some deals with very "difficult to reach" people only by virtue of showing respect, the respect of making an educated offer from the outset. It wasn't that I knew this from the start. If only I was that smart. I learned the hard way and early on blew a few opportunities to possibly make a deal. When it comes to taking the wrong approach to dealmaking you soon learn that some doors, once closed in your face, will simply not open again. Sophisticated domainers need my money about as much as they need the aggravation of dealing with an unsophisticated buyer - "me", at that time.

Folks need to tune into reality if they are going to make a pitch for a quality domain. You are not buying a used car from a used car dealer, someone who needs to make a sale so he can pay his rent for his used car lot. Far more often than not, with prime domains you are dealing with a sophisticated business person. So, get a good offer number worked out and make your offer.

Otherwise your email - the one about buying a domain - will be deleted without the recipient ever opening it.

[edited by: Webwork at 4:16 am (utc) on June 14, 2007]

zulu_dude




msg:3367552
 3:27 pm on Jun 14, 2007 (gmt 0)

Webwork, thanks for the insight. In light of what you've said, I have been going about this the wrong way... when it comes to buying domain names, I have very little experience, so tips like you've shared are very helpful!

Here's hoping that my next approach works!

Gremlin098




msg:3367581
 3:51 pm on Jun 14, 2007 (gmt 0)

Here's a simple estimate you can do:

Estimated parking revenue for 10 years ($50/month): $6,000
Renewal fees for 10 years ($7/yr): $700
Estimated net profit after 10 years: $5,300

Then quadruple the estimated profit, because we're pretty sure good domain names will increase in value. Then halve that figure because there's a little voice in the back of our minds saying "what-if Google finds a way to make domain names irrelevant and they become worthless in 5 years".

I would accept that offer on most of my domain names. But then there are a few I plan to develop when I'm retired because they are related to things I love to do - and you won't be able to pry those out of my account without offering enough to retire on.

Olney




msg:3367641
 4:53 pm on Jun 14, 2007 (gmt 0)

I've had a number of pretty good offers this year that I turned down for Japanese domains.
A lot of things can depend on the value currently & future value of the market. Sell now so someone can resell 3 or 4 years later for 100X what they paid me is not what some want to do.

woop01




msg:3367643
 4:54 pm on Jun 14, 2007 (gmt 0)

In the same spirit as Webwork, we've found that starting any offer off with "I realize this is a premium domain work [four/five] figures and we're serious about making a legimate offer" is about the only way to get a response from people who have legit domains.

netmeg




msg:3367669
 5:16 pm on Jun 14, 2007 (gmt 0)

It's funny I came across this post - not half an hour ago, I got a phone call from someone who wanted to know if he could buy a domain that belongs to one of my clients - the thing is, the domain has belonged to them for over ten years, it's been trademarked even longer (it's a retail cosmetic product that's been around for at least thirty years that I know of) and I'm not sure why in the world he thought they'd even entertain the notion of selling it. This wasn't a parked domain, mind you, it's an e-commerce site that SELLS this product for people whose drugstores don't carry it. And this guy starts out by saying he has a project for which this domain would be ideal. Weird.

oneguy




msg:3367684
 5:37 pm on Jun 14, 2007 (gmt 0)

I'm quite keen on buying quality, generic domain names to develop. However, I've made numerous approaches to people who own good, generic domain names, with an offer to buy the domain name, only to be informed that it's not for sale. Not "it's too expensive for you", simply "it's not for sale".

I have several domains that get a steady stream of offers. Usually, they aren't even in the same ballpark.

I have a few that are "not for sale" because I don't believe I'll ever receive an offer anywhere close to my valuation. That's usually because I have some grand idea. Of course, all of my domains are really for sale. Some of them would just take crazy offers.

I've sold a few for good prices when caught at just the right time.

SlimKim




msg:3367971
 9:54 pm on Jun 14, 2007 (gmt 0)

you might want to try using Network Solutions certifed offer service.

i get offers through there and have sold one name that way

at least the name holder is assured you mean business even if your offer is to low to motivate them to sell

carguy84




msg:3367980
 10:03 pm on Jun 14, 2007 (gmt 0)

I don't know if I've ever come across anyone on the buying side of a transaction who wanted to start off a sale by negotiating AGAINST themself. Throwing out YOUR(the buyer's) number before they've given you THEIR(the seller's) number is completely opposite of the way you want to proceed as a buyer. Why throw out $150,000 if the seller was willing to let it go for $100,000? Because you don't want to hurt the seller's feelings by insulting his intelligence by asking if the domain name is for sale, if so how much? I dunno, I'd rather not over spend than worry about that. :) As a seller, ya it would streamline things, but I've never come across this approach on either side.

You always, always, always, always, always, ALWAYS want the seller to give their number first - in any transaction. Always. Maybe your emails will get ignored, maybe not, but it's far easier to send another email than it is to offer less money after you've already offered more.

I've never not taken ownership of a domain name I wanted, and I've never lead off an exchange with "I'll buy your domain name for $$$.$$". Sometimes I end up as a full owner and other times I've ended up as a co-owner in charge of handling development. I've also never run across a PO'd domainer so I haven't seen that side of the business, but I have used free email addresses along with company.com email addresses and sometimes both for the same domain - and I can tell you from experience, the prices fluctuate if your company.com is in the same vertical as the domain you're asking about. Learned that one the easy way. :) I've never been ignored when I've emailed from a freemail(gmail) address either, fyi, but I'm also not going after 6 figure domain names, so YMMV in that league. All of my transactions have been in the $,$$$! - $$,$$$! (edit - apparently you can't have 3 x's in a row as it gets filtered).

Just remember one thing from this rambling - throwing out your number as a buyer first = bad. :) As a seller I know what I'd get rid of a domain for and if some one can buy it for that, done deal.

Chip-

woop01




msg:3367993
 10:14 pm on Jun 14, 2007 (gmt 0)

carguy84, if you are going to somebody who is actively selling a domain, your advice would be spot on.

However, there's a different dynamic at work when attempting to buy a domain that is not actively being sold. You'll get any further contact ignored if you offer $500 on a $25k domain or if you insist that the current owner tell you a price.

Webwork




msg:3368055
 11:28 pm on Jun 14, 2007 (gmt 0)

Irony: A member named "carguy" advises "never communicate your number to a domainer" in the same thread that the domainguy advises that "buying better domains is not like buying used cars."

Carguy, I respect your intelligence and what you bring to the forums. Truth. But your domain acquisition methodology will fail miserably in so many cases, as confirmed by so many comments shared between myself and my fellow domainers, that I have to advise: Stick to giving advice about buying and selling cars, carguy. ;-P

I shall now retreat to whack from my inbox the 3 "Is your domain for sale", "I'd like to buy your domain Example.com" and "How much do you want for Example.com?" emails that arrived this afternoon. There is no hope . . for those who don't read and grasp the gist of this thread. ;)

[edited by: Webwork at 12:14 am (utc) on June 15, 2007]

Bennie




msg:3368112
 1:40 am on Jun 15, 2007 (gmt 0)

Webwork, that was an awesome opening post. Spot on and something everyone should read and understand. Once smart folks cotton on domain prices will only rise. Get in while you can, this will not last forever.

[edited by: Bennie at 1:43 am (utc) on June 15, 2007]

carguy84




msg:3368137
 2:31 am on Jun 15, 2007 (gmt 0)

Irony: A member named "carguy" advises "never communicate your number to a domainer" in the same thread that the domainguy advises that "buying better domains is not like buying used cars."

ironic indeed, and not Alanis Morissette irony either; although for the life of me, I can't find domainguy's post. :¦

But your domain acquisition methodology will fail miserably in so many cases, as confirmed by so many comments shared between myself and my fellow domainers, that I have to advise: Stick to giving advice about buying and selling cars, carguy.

Ha, well, as I stated, I'm batting 1000 when it comes to MY methodologies, but I'm also in the lower end market of the domain names I've picked up, none have ever reached 6 figures and none probably ever will as the fun for me now is being creative with naming and less generic *all encompassing* names(photography.com, cars.com, sports.com...). But if I ever did have a situation where my emails weren't getting replied to and I needed the domain name, then I could implement your method from a different email address. But I wouldn't ever start with it. I'm not sure where most people on here fall into in terms of the domains they're trying to purchase, but the vibe I got was in the 4 figure range. I could be way off though.

LOL @ selling cars - not my gig, I have a conscience ;), but the last thing you do as a buyer is discuss price, not the first. The car salesman is the one pushing price up front...

Chip-

gabby




msg:3368209
 3:56 am on Jun 15, 2007 (gmt 0)

It doesn't matter if you are buying or selling Manhattan real estate, diamond rings, 10 year old cars, or domain names. The first rule of negotiation applies:

The first person to mention a number loses!

By the way, why is a lack of conscience required in order to sell cars? Does the same logic apply to other commodities?

gomblue




msg:3368218
 4:21 am on Jun 15, 2007 (gmt 0)

In many cases - no one is selling a domain name. There is only a buyer looking to acquire it.

The buyer should show that they are serious about an "acquisition". The only way to prove to the domain holder that the buyer is serious is for the buyer to throw out a number. If the number is too low, there may be no response back.

A fairly obvious side point:
I've seen threads on this forum where someone is willing to sell a name for as little as $50. Unless I'm getting $500 (and that is for a rather poor name), it's not worth my time.

Edwin




msg:3368280
 6:38 am on Jun 15, 2007 (gmt 0)

The first person to mention a number loses!

... and all "sophisticated" domain owners already know that, which is why emails asking them to name a sale price get deleted or ignored.

[edited by: Edwin at 6:38 am (utc) on June 15, 2007]

piatkow




msg:3368433
 10:39 am on Jun 15, 2007 (gmt 0)

I have always put emails offering to buy or sell domains in the same category as fake rolexes and viagra and routed them straight into the spam folder. I have never even opened one to see if it was a genuine offer. I am sure that a lot of other people approached to sell their domains do the same.

Webwork




msg:3368575
 1:16 pm on Jun 15, 2007 (gmt 0)

Folks, this thread is about effective approaches to buying quality domain names, not about the evils of people "not using" domain names nor the error of using a generic domain. Regrets to the members that took the time to intelligently respond to the off topic posts. Your posts were, of necessity, removed after the off topic posts were first removed.

Please see WebmasterWorld TOS #16

Please stay within the topic area of the forum you are posting a message in, and within any topic that another poster may have started.

gmac17




msg:3368579
 1:30 pm on Jun 15, 2007 (gmt 0)

I can't agree enough with the comment about emailing someone from a real address.

I am currently negotiating with a pretty big law firm in a major city for one of my domain names. I can guarantee you that if they sent me an email from a gmail account I would not be in negotiations with them right now. Knowing their identity allows me to trust them and allows me to know they aren't just sniffing around.

vincevincevince




msg:3368590
 1:40 pm on Jun 15, 2007 (gmt 0)

I've never had a productive end-point to trying to buy a domain. If someone can tell me how to get a domain out of a registrant for 5x regfee or below, I'd be delighted to hear it.

I often see domains valued at regfee, but the moment you come offering to buy the seller is after 20x regfee+

Business plan:
1) Buy domain
2) ?
3) Riches

Kirby




msg:3368738
 4:05 pm on Jun 15, 2007 (gmt 0)

I negotiate for a living, so I come down on the side of carguy on this one. The first rule of negotiating is to never make the decision for the other party. You never know what can happen.

A few weeks ago I received an email from someone who has hit me up 3 years running for a particular domain. It said, "This is a serious offer. What would you take".

My response was to tell him the highest number I have turned down to date. It basically set a baseline to any future negotiations. Neither of us gave up our negotiation positions up front.

A few hours later I got another inquiry from someone else.

"When you decide to relinquish your domain..."

I gave them the same response. They came back with "Can't afford that".

Two days later the first guy comes back with a price just below the number he knew I rejected. Two counters later, escrow is open and that afternoon 6 figures is wired to my account.

If he had offered me $5-10k in his email, the conversation never would have taken place. If I had responded with a ridiculously high price, the negotiations would have ended as well.

If you want to succeed as a domainer, you need to know how to negotiate.

Kirby




msg:3368745
 4:10 pm on Jun 15, 2007 (gmt 0)

I can't agree enough with the comment about emailing someone from a real address.

I am currently negotiating with a pretty big law firm in a major city for one of my domain names. I can guarantee you that if they sent me an email from a gmail account I would not be in negotiations with them right now. Knowing their identity allows me to trust them and allows me to know they aren't just sniffing around.

In my previous example, the initial email came from a UK Yahoo address. Once we got serious and he suggested an escrow service, I checked him out there. They knew him as an active and able buyer.

Creating hard and fast criteria upfront can kill an opportunity prematurely.

Webwork




msg:3368774
 4:31 pm on Jun 15, 2007 (gmt 0)

I negotiate for a living

Kirby, as a practicing civil trial lawyer for 25 years, in a system where upwards of 97-98% of all filed lawsuits settle by negotiation, I would grant myself the right to say the same thing: I negotiate for a living.

That fact doesn't alter a word of advice I've given and I'm not saying you are wrong and I am right. What I would say, more than anything, is to know your numbers - and in the case of better domains - show respect for the intelligence of the person holding those domains, including an awareness that many - I'll venture most domainers holding high quality domains will simply ignore emails with subject lines such as those stated above or emails whose content is little more than a repetition of the subject line.

I will also reaffirm that many, perhaps most portfolio holders, will look askance at emails arriving from Yahoo, Gmail, etc.

The OP questioned "Why am I not getting a response". I've replied that there are reasons why you are not even getting in the door. I offered information about the status quo in the domain portfolio world to help guide anyone approaching a domain holder, information that might help build a context for approaching a quality domain holder.

Once someone gets their foot in the door - if they do - how they proceed after that is always a personal choice. I view every encounter as potentially unique so, in my own practices, there have been and likely will always be exceptions to the general rules. (Such as, in the course of writing this post, I just quoted a price for a minor domain.) What I've attempted to do is to illuminate why or how inexperienced folks may not be getting their foot in the door or getting the door shut on their foot. :)

So far as your approach, Kirby - dictating the the domain holder has to blink first (name a price) - I've got to say that a growing number of holders with grade-A domains aren't blinking these days. That's likely or largely because their eyes are intently focused on bigger game: development.

Folks, I know Kirby and he is a very bright fellow so feel free to follow his lead. Just not with me. His advice won't work. The door will not open and if it does the odds are very high that I'll realize I've made a mistake and you will abruptly find yourself thrust back into the matrix, somewhere in the Andes mountains, next to some guy with a llama. ;)

P.S. Nice sale Kirby. Does this portend you buying a round of beers in LasVegas/PubCon? :)

[edited by: Webwork at 5:09 pm (utc) on June 15, 2007]

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