[ericd]

Yes, speculating in general is a zero-value-add activity except in that it sometimes makes markets more efficient/liquid. I would argue that domain squatters don't even make the domain market more liquid at all, because ICANN is an extremely-easily-accessible seller, and the squatters rarely provide the service of buying a domain from someone who has improved it/made it popular/etc.

But in general, I have little respect for most people who make their money via speculation due entirely to demand outstripping supply as in the case of event tickets and boom real estate markets. Basically, anytime someone is extracting money from the economy en masse without providing much/anything in return, is when you should be mad. Scalpers and people who buy a ton of land in a high-demand market just to sit on it rather than developing it definitely qualify, so yeah, I'd be mad at both.

[meric]

It's not much, but domain squatters do provide 1 value.

By selling the domains closer to their true market value it means when a domain do get bought, it'll be because the domain will be part of a more profitable business.

Imagine if when thefacebook.com wanted to purchase "Facebook.com" domain because their business is expanding quickly and profitably. They ask the owner of "Facebook.com" for the domain.

One of the following two things might happen:

1. The owner is a domain squatter and sells it to thefacebook.com for $5000.

2. The owner is a 13 year old kid who bought the domain and put a couple of pictures of his cat's faces on it. as well a couple of adsense ads. Refuses to sell for anything less than 0.5 million dollars because he really likes the domain name.

Arguably in this case the domain squatter did provide some value to society. The thing with squatters is they are always willing to sell for the right price. Other types of domain owners are not so predictable. In particular, domains with established businesses are unlikely (I'm guessing) to sell for anything less than the value of the entire business, even though that business may be less profitable and less value-adding than a business proposed by a potential acquirer of the domain. If the domain was squatted instead, the less profitable business may not have bought it at all, leaving it for the more profitable business.

Whether this value is significant enough to be respected is another question, but I have no doubt that it does exist.

[ericd]

Heh interesting idea, but I'm pretty sure the kid could be convinced to sell for $5000, probably much less - there aren't many kids out there that would scoff at multiple years' worth of allowance and lawn mowing money just falling in their lap. I think a market composed of people actually using the resource can set fair market pricing without the involvement of speculators. Domain speculators/squatters literally only drive the price of doing real things up.