Domain names vs real estate

I was reading some of the debate regarding this guy and his business:

The man who owns the Internet

and got to thinking about the comparison between domain names and real estate. One of the things that irritates me about domain name squatters is that they can essentially sit on a good name forever, at very, very little cost. You can’t do that in real estate, because you have to pay property taxes, which acts as an incentive to actually do something productive with the property, rather than simply let it sit there until someone comes and offers to buy it from you for even more than you paid. So you can’t let the space go completely to waste – you have a big incentive to at the very least rent it out to someone who can make money with it. You can’t really rent out a domain name, though. Since it’s an integral part of your brand and identity, it would be insane to borrow one for a few years, whereas with a physical business renting space, people will still be able to find you if you move.

Perhaps an annual tax based on the purchase price of domain names would encourage people to either do something valuable with them or pass them on to someone who could? I don’t think anyone would be sad to see pure speculators gone, but on the other hand, I have a strong suspicion that all the extra taxes and red tape would make the idea a net negative, and taxes on ‘real’ domains like google or ebay, would simply be passed on to consumers, and so wouldn’t be desireable.

In any case, it’s something interesting to think about.

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