I don't think it's really doom and gloom, that's mostly on here.

The normies are all still excited/scared and the valuation based on secondary trading is going up and up.

Maybe not quite as crazy as the dot com boom but I'd say the current environment for AI and related equities is a lot closer to the mid/late 90s than 2004

Normies are on fire for SpaceX, where the economics are horrible and the hype is off the charts.

Normies have never heard of Anthropic, where the economics are incredible and doom vibes are pervasive.

I think both have a similar amount of people who know about it. But it might just be my circle which is mostly in finance and some in engineering/medicine. These are also the type of people who actually invest. There's little doom vibes among those who're older if anything they're the one who think we'll get to some agi type situation.

I don't buy Anthropics narrative around their "incredible" economics, actually, I feel a lot of wework vibes from them.

> astounding ... margins

Citation needed for that one.

"until I can get a few shares at a reasonable valuation"

I doubt you will. Most likely IPO reference price will be like SpaceX's, 100x ARR or so.

You're better off buying Google who own a huge chunk of Anthropic at a much saner average.

If it's 100x ARR then I'll watch from the sidelines.

But if it's 40x in October, and inference margin is strong, and revenue is still growing 20% per month, then I'm in.

For reference, here's an NYU prof's website which shows typical ARR valuation multipliers by industry (see Price/Sales ratio column):

https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...

100x is staggering. These companies are priced as though we are already chewing through the solar system to create AI computronium. I'll pass--I expect I'll get a UBI when that scenario happens anyway.

Google is an excellent example of the companies that followed after the initial batch of big dotcom companies. They ate Yahoo's lunch. The dotcom bust was in 2000, and Google went public in 2004.

I'm betting more on the successors to this initial group of AI companies. The ones that have to build actual profitable businesses.

Google was easily 10x better than any of their competition. It was effectively alone in the market.

Most of us were using 56k modems to access the internet back then, Google's search returned results within a couple of seconds. Yahoo, Lycos, Excite, Alta-Vista were still loading. Then the search results themselves were so good you could often just pick the first result. They eventually added a button which just took you directly to the first result. Which I used.

Curious, why do you say that as if the "I'm Feeling Lucky" button isn't still on the homepage in 2026?

I couldn't even tell you when I used the Google search page. It's been years at least. I wouldn't be surprised if many other people also don't go there to search. I assume most search straight in the url bar.

Home pages are still a thing are are often set to google

Because it is useless now.

Because it’s not there on mobile

> Alta-Vista were still loading

Your memory is faulty. AltaVista was always super fast--it never had the advertising bloat that the other ones had until the very end.

The problem AltaVista had was that it didn't scale when the Internet went exponential--so AltaVista would give you good search results until you asked current, topical questions. AltaVista relied on running a single, super-expensive stonking huge Alpha machine while Google ran on lots of commodity servers that spidered constantly.

This is inaccurate. When I was running AV operations around 2000, we were running on a couple dozen huge Alpha machines for the index layer and queries. We had a bunch of smaller machines for Web serving, and a high memory set of Alphas as a caching layer.

See https://www.usenix.org/legacy/publications/library/proceedin... for the 1997 server count, which was before we got to the three tier architecture.

We also spidered constantly. A couple of those huge backend Alphas were dedicated to holding the constant spider index. AV had a well earned reputation for quick discovery, although I think Google wound up faster. We suffered a bit from maintaining separate indexes for the main corpus and recent pages, and I imagine Google handled that better.

But the period of time when our main index went to hell was the period of time when we failed to do a new main index crawl for several months. I won’t get into why that happened politically because my memory isn’t perfect and I don’t want to criticize anyone who won’t see this to stand up for themselves, but it’s absolutely the case that we let the index get stale.

And I will say that I think the execs were distracted by the idea of challenging Yahoo by buying a shopping site and a local news site of sorts and, unlike the Google of the time, they lacked the wisdom to focus on our primary product.

And now I fade back into the hedges, until the next time AV comes up… I suspect a high percentage of my HN comments are on this exact topic. It makes me sad.

FWIW, I preferred AltaVista over Google back in the day.

I stand corrected. Thanks for all your work.

And I still miss the AltaVista illustrated diagram (Java Applet) that would allow you to drill down and specialize the search results. No modern search has ever matched that, again.

That feature sounds amazing! I tried searching wayback etc but wasn't able to find any more details. Do you happen to know of any screenshots / deeper descriptions for it?

Perhaps we could nerd snipe Marginalia Search to add it :)

I remember it being a Java applet with animations, but my memory could be terribly faulty at this point.

Following your comments and trying to trail things out, the only thing I can find is a reference to AltaVista LiveTopics.

https://dannysullivan.com/why-search-sucks-you-wont-fix-it-t...

I suspect what I used was that "GRAPH" button in the AltaVista Refine picture.

We might want to archive that image. It seems like the only evidence that this stuff ever existed.

Thanks, AltaVista LiveTopics is a good keyword. I found:

https://www.researchgate.net/figure/Alta-Vista-LiveTopic-Gra...

which has some different coverage.

I did try to archive the blog you linked but unfortunately the owner is blocking it with robots.txt

User-agent: ia_archiver Disallow: /

That hyperbolic tree looks very close to what my faulty memory recalls.

I suspect it was a later incarnation that I used.

It was a fun place to be. Sorry if I came across as curt — rereading that I was a bit more blunt than I intended. Sick cat has been stressing me.

No offense was taken. It's always good to hear from the people who actually did stuff to set the record straight.

> It was a fun place to be.

It was. I was in the hardware side during the Hostile Giveaway(tm) to Intel and Compaq.

Good luck with your cat.

From the oral history interviews, it seem one of the tricks was keeping the core algorithm in cache completely.

I was not a software engineer but yeah, I think so. Every now and then we’d have to go get Mike Burrows to do some consulting work to rewrite a bit more of the code in assembly.

Thanks for replying, now I remember why I used to spend all day on this site :-) A lot of the political changes and my exposure to some of the VC people outside of public view have soured tech for me. That and the current cult-like behaviour and clear fraud from the crypto and now AI waves... anyhow, I digress.

We were big AV users initially, I think for 2 years? This was 94-97 so my memory of the time periods is fuzzy. When Google came along I have very vivid memory of it providing not only better search results but also faster loads times.

I wonder if Google was already geo-distributed at the time? Latency was real then, it wasn't uncommon to hit 350ms (compared to 20-50ms to Europe) and the difference would have been felt back then. It was a killer for Counter Strike.

Webcrawler was faster than both!

No it wasn't. Google had a tiny front page back then, Alta-Vista was visibly slower. Very similar to Excite. All of the others were terrible.

Yea, that's easy to say now.

I was a relatively early investor (2008), but I was very hesitant early on because Microsoft was building an integrated search function, which became Windows Live Search, which became Bing. I definitely remember it took me to the beginning of the financial crisis to finally decide that it was going nowhere. I suspect it was the development of Google Maps that changed my mind.

"Google" of today is really AdSense ($102M, 2003) -> Android ($50M+?, 2005) -> YouTube ($1.6B, 2006) -> Google Docs ($50M+?, 2006)

Without those prescient and lucky acquisitions, we'd be talking about a "Google" that looked much more like Yahoo.

It wasn't search proficiency that built the empire, it was leveraging a transient search quality advantage into cash flow, then plowing that cash into acquisitions to construct a durable moat.

I remember late 90's, early 2000's Google. Search result quality was still better than the competition (mainly Altavista...)

But that only would have lasted until the next search innovation and/or competitors copied Google's indexing.

There were many search engines around during that time. Yahoo, Excite, Microsoft Live Search, Lycos... I don't recall any of them improving enough to rival early 2000's Google.

None of those scaled as quickly as Google in terms of revenue (read: AdSense), and Microsoft lost interest.

AdSense wasn't a thing until 2003. Google didn't have much revenue before that. However, they still surpassed their competition in quality of search results long before...

Yes. My point is that Google had a temporary search quality advantage… then AdSense-fueled revenue allowed them to convert that to a durable moat by outspending their competitors.

That didn't happen because they were magically amazing at search forever.

It happened because Google had a good business plan and could afford to throw gobs of money at engineers and infrastructure, in quantities that even Microsoft was unwilling to match.

Was on a team that was trying to sell AltaVista a social media presence (before facebook/myspace/etc). Our people were mostly using Google, but we still wanted the client. One of the "moderation experts" on our side (i.e. - not tech or busniess) who evidently didn't understand what AltaVista was about asked them "Why don't you just use Google? It's better".

Erm 2008 isn't early, I had been using it for almost a decade by then. They had won by 2001. No-one who knew Microsoft thought that they had a chance with Bing. This was post-Gates and Microsoft were already a laughing stock in 2008 with respect to the web.

When did Google pivot to advertising?

Before the IPO; AdSense came out in 2003. Before that they really make much money.

Simple text ads to start. It was built on MySQL, Java and C++ and became how they made most of their money.

So you're raising the topic of vibes, to tell us to ignore them.

Most of the time, they're wrong half the time.

History does not repeat itself, but it rhymes. Drawing these comparisons to the Dotcom bubble is only of limited utility. I think there's good reason to believe that recursive self-improvement is a bust, and LLM models will become a commodity. The real value lies in multi-modal integration and good harnesses. The current frontier labs are theoretically in a good position to capitalize on this, but it is far from obvious that they will succeed. I think Google and some of the chinese giants are in a far better position to actually go the last mile.

They've changed the rules that will force these companies into every ETF commonly held by people's 401ks. The doomer narrative doesnt matter, they're forcing the common man to be the exit liquidty for the elite before the bubble pops.

>I can only hope the doomer narrative dominates until I can get a few shares at a reasonable valuation.

I conjecture that some amount of the "doomer posting" is a consequence of other people realizing what you realized here and attempting to sway public sentiment for personal gain.

I doomer post because I see three basic possibilities:

* It's a bubble, it crashes (no moat etc.)

* It's not a bubble, we get superintelligence, it's not nice, it squishes us all like bugs

* It's not a bubble, we get superintelligence, it's nice, we all get UBI

From the perspective of your personal financial security, the range of scenarios where you want to invest in Anthropic seems rather narrow. And I don't like to fund the creation of something which might squish me like a bug.

Ah yes, time tested and battle hardened inference margins.

Anthropic is selling a commodity item that was just invented. It’s like investing in someone who is blowing lightbulb glass by hand.

We’ve already seen a startup make a chip which generates a hundred pages of text in milliseconds. When companies start bringing out hardware like that for cutting edge models, the entire business is dead. AWS will just eat the market.

Anthropic is a software company.

> focus on revenue growth rates and inference margins

And ignore debt you can't pay back? Fine during ZIRP era because there was always another $50M around the corner. There is no extra $50B around the corner.

They've all over-invested in AI, same as the railroads, and it will collapse the same way.

I don't see how they can keep their margins with all the pressure from Chinise models. It got to be race to the bottom on margins.

They (together with OpenAI and maybe Google) can have better margins on frontier models, but the demand on those got to be much lower

Exactly. Many people will choose the cheapest possible model that's smart enough for their use case. "Frontier" is a transient property; open models tend to catch up in 6 months or so.

I am really surprised that people are comparing dot com with AI. Atleast dot-com era was deterministic, comparatively AI is just a probabalistic unreliable slop

  The growth of the Internet will slow drastically, as the flaw in “Metcalfe’s law”—which states that the number of potential connections in a network is proportional to the square of the number of participants—becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.

- Nobel prize winning economist Paul Krugman, in 1998, https://quoteinvestigator.com/2023/10/26/internet-fax/

(Why do people try to criticise AI as "probabalistic" like this matters? Unreliable I get, but early Wikipedia and Geocities were as deterministically unreliable as the amateur and fiction sections respectively of a bookstore)

An economist exytrpolating tech trends is already a hard sell. And deterministic unreliability is atleast deterministic meaning you can choose to ignore, this is still better than probabilistic AI hubris

You've covered both bases here.

The issue is that the way the rules have been changed, risky stocks have been added to a product that is meant to be stable.

A 401k, any retirement focused product, is not serving its purpose when it tags on risk.

Having people in the later part of their lives find they are broke, becuse despite them doing everything right, a loophole was created to extract their savings.

This is simply not right.

Revenue growth might be great, inference margins might be great. Where's the moat?

I'm not against a fundamentals-based argument. The revenue growth is wild and their margins are reported to be great. But the existential concern remains: what happens if models start plateauing?

I could be wrong, but the margins are so good because there isn't a "substitute" for the frontier models. The performance difference between the latest Opus and a more open model provider is large enough to justify the extra cost. If that difference shrinks, I think the cost people are willing to pay will go way down.

I would argue models have been plateauing for quite some time now.