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Disharmonic Convergence

6:00 PM -- Sitting here listening to a classic Steely Dan tune on XM Radio, I think it must be nostalgia day in Silicon Valley.

First there's the news that after a long, depressing slide from its glory days in the mid-1990s, Silicon Graphics has finally filed for bankruptcy. In its Chapter 11 filing, SGI said it had been "challenged by delays in introducing new technology, a focus on more specialized markets and more intense competition from larger rivals," according to Reuters.

In English, the company, which once sold high-performance graphics work stations to Hollywood studios, has been crushed by the shift of special-effects technology to less costly programs that can run on desktop PCs.

Meanwhile, on The Wall Street Journal online, there's a profile of George Gilder (sub. req.), the defrocked high priest of the Internet revolution. Gilder, whose "Telecosm" theories preached unlimited economic growth thanks to free, limitless bandwidth, barely avoided bankruptcy himself and now lives in a house with a creditor's lien on it. At 66, the former Nixon speechwriter has seen the circulation of his newsletter, the Gilder Technology Report, dwindle from a peak of 75,000 to under 5,000 today. Proving that he's lost none of his fondness for loony theories, he's devoted increasing time of late to espousing "intelligent design" as an alternative to evolution.

Interestingly, the forces that carried Gilder to tech-pundit stardom -- the increasing power of networked computers running high-bandwidth, distributed applications -- are the same ones that led to SGI's downfall. Gilder foresaw the day when you could just about create a movie like "Finding Nemo" on your laptop, thus rendering SGI's powerful machines obsolete; he just got the timing wrong.

And by the way, lest you think he was a complete crackpot, the Journal includes a chart showing how $10,000 invested in the "Telecosm Technologies" list of stocks would have fared since 1997. The current value would be $30,270 -- a 203 percent increase. The Dow Jones Industrial Average, which closed today near its record high, has risen 80 percent in that time.

— Richard Martin, Senior Editor, Unstrung

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