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Well, if the Council doesn't buy it who else is going to? Yes, it will have traffic but where the hell are you going to direct to make money? If you tried to sell the traffic from such a website, nobody would want it, as in commercial terms it is junk. Personally, I would give them them choice $500 or WIPO.
They (the council) seem to have the name back now. Does anyone have a nice word to say about Easyspace? I still get sales calls from them asking if I want to renew a name that I long since transfered away (thank god).