[panarky]

If we're doing historical comparisons, there was so much hype for AOL and Yahoo that drove valuations far beyond the economics. In time, the hypesters were proved wrong.

In contrast, there was overwhelming doom and gloom for Google's IPO, in spite of their incredible growth and margin economics. In time, the doomers were proved wrong.

There's so much doom and gloom about Anthropic that directly contradicts their astounding growth and margins. For a long-term investor, Anthropic is looking a lot more like Google not AOL.

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

Vibes are almost always wrong. Ignore the vibes and focus on revenue growth rates and inference margins.

[pseudosavant]

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.

[radicalbyte]

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.

[bsder]

> 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.

[BryantD]

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.

[bsder]

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.

[BryantD]

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.

[jhy]

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 :)

[BobbyTables2]

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

[panick21_]

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

[BryantD]

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.

[radicalbyte]

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.

[bparsons]

Webcrawler was faster than both!

[radicalbyte]

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.

[scoofy]

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.

[ethbr1]

"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.

[icedchai]

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

[ompogUe]

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".

[ethbr1]

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

[radicalbyte]

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.

[vinnymac]

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

[bravoetch]

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.

[esseph]

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

[sunnybeetroot]

Because it’s not there on mobile

[consp]

Because it is useless now.

[analog31]

When did Google pivot to advertising?

[parasubvert]

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.

[davedx]

"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.

[0xDEAFBEAD]

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.

[panarky]

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.

[ifwinterco]

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

[panarky]

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.

[boelboel]

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.

[elzbardico]

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

[EvgeniyZh]

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

[0xDEAFBEAD]

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.

[intended]

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.

[0xbadcafebee]

> 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.

[antasvara]

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.

[moljac024]

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

[ai_fry_ur_brain]

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.

[card_zero]

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

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

[0xDEAFBEAD]

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

[sigmar]

>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.

[0xDEAFBEAD]

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.

[piker]

> astounding ... margins

Citation needed for that one.

[whall6]

Ah yes, time tested and battle hardened inference margins.

[newsicanuse]

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

[ben_w]

  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)

[newsicanuse]

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

[MagicMoonlight]

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.

[lobocinza]

Anthropic is a software company.

[arw0n]

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.