# Mary Meeker's YouTube Math Misses The Mark

### from the back-in-the-news-together dept

YouTube’s new ad overlays continue to engender a lot of discussion about their potential impact on the online video market. One person who is quite optimistic about the program is the infamous (but still employed at Morgan Stanley) Mary Meeker, who estimated that the new system would add a staggering \$4.8 billion to Google’s top line. But, as none other than Henry Blodget points out, there’s a little problem with Meeker’s analysis (via Valleywag). She mistakenly took CPM to mean ‘cost per impression’ rather than ‘cost per thousand’, meaning that her estimate was off by a factor of 1,000. In other words, by her own logic, the new ad system will contribute lead to a modest \$4.8 million revenue bump, which is nothing compared to the \$1.65 billion Google paid for the site. Meeker has been covering this space for a long time, so it’s hard to imagine that she really didn’t know what CPM meant. Perhaps she was just trying to rush out a quick report on the topic and didn’t take the time to look it over. But you’d still think that such a huge figure would give her some pause and make her question some assumptions before coming out with such a bold pronouncement.

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new ad system will contribute lead to a modest \$4.8 million revenue bump, which is nothing compared to the \$1.65 billion Google paid for the site.

Huh? Am I missing something here? Pay \$1.65 billion, revenue growth of \$4.8 billion? Sounds ok to me. Would imagine the \$4.8 billion is per year. Top line is revenue growth. Maybe she said \$4.8 billion bottom line?

Ajax 4Hire (profile) says:

# She is not an engineer,

an engineer faced with numbers that do not seem to make sense knows to run the numbers again.

The numbers have to make sense and if they do not make sense then you need to go back to the math and understand. Then the numbers will make sense.

If you see an engineer give you an answer and then scratch their head, rub their chin or scrunch their face, then don’t believe the answer. It is just a guess.

More fun with engineers: get one to say never/always or it is impossible.
They are trained to think that nothing is impossible, it only takes enough research/development and money.

LBSufer says:

# Re: She is not an engineer,

that’s because almost nothing is impossible with enough time/money/research.

Yes….I’m an engineer.

But, you were right about engineers actually analyzing the numbers you get. Order of magnitude tells a lot in your results.

Overcast says:

Yeah, but you know – it’s kinda meaningless.

How many times do you see a Burger King commercial and end up at Taco Bell? *thinking, oh ya, fast food sounds good* – which one is almost irrelevant. There’s a couple of fast food places near me I won’t go to, I don’t care how many commercials I see – because, they quality sucks – BAD.

It’s funny how some places will just dump millions into ads and then pay their employees like crap – and when you pay like crap, what kind of job is going to get done? Well – ya’ know, you get what you pay for.

Which is just why I don’t buy half of the products out there – they are garbage.

Take Mattel for instance – there’s absolutely no way I’ll buy my nieces or nephews a toy from them. Sorry, no ‘savings’ can possibly offset the risk of contamination or poisoning from their inept manufacturing. Just stating a fact. I think I’ll look more for domestic products now in general.

Anonymous Coward says:

# Re: Re:

What? Did I miss something? Or have I just been stricken stupid today?

Perfectly Sunny says:

# Re: Re: Re:

You didn’t miss anything. The signal from Overcast has been corrupted due to poor weather conditions. Ignore his ramblings about ads and quality of food.

Boris Hedgeson says:

# What's the problem?

She was clearly talking about the 1000 year profit.

nonuser says:

# maybe she got the idea from Austin Powers

“We predict this remarkable service could add as much as five million dollars to Google’s top line.”

*room erupts in laughter*

“Wait! Our model now predicts the revenue growth will be… five billion dollars!

I once tried this logic with the IRS says:

I told them it was a rounding error…they said it was fraud. Stupid IRS.

JayDawg says:

# uh-oh

Looks like someone’s assistant is going to get the ax.

victor says: