Mary Meeker Fixes More Than Her Math In YouTube Report

from the number-massage dept

Last week, Morgan Stanley internet analyst Mary Meeker was embarrassed when it was revealed that a math mistake on her part caused her to vastly overstate (by a factor of 1000x) the revenue potential from YouTube’s new ad overlay system. After having her mistake pointed out to her by none other than Henry Blodget, Meeker went back and fixed the report. But she did more than just correct the math. She also tweaked some of her original assumptions so as to boost the significance of the new advertising scheme. Whereas she originally predicted that ads would be shown on approximately 1% of streams, that number has now been boosted to yield a greater revenue impact. Meeker’s new model now has the company garnering an additional $75-$189 million in net revenue over the coming year, as compared to the $720,000 that her original model predicted. This whole fiasco is quite revealing about the way Wall Street analysts sometimes operate. Rather than start out with a fixed set of assumptions and then figuring out what that will result in, they come up with an end result and then figure out what reasonable assumptions will get them there. While we’re sure that this sort of thing happens all the time, it’s rare to get such a stark glimpse into the way it happens.

Filed Under:
Companies: youtube

If you liked this post, you may also be interested in...
Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Mary Meeker Fixes More Than Her Math In YouTube Report”

Subscribe: RSS Leave a comment
Slavito (user link) says:

They Teach it in Business Schools

Having recently completed a business degree, I can attest that everybody does this… in class projects. Perhaps, Mary picked up the number skills at Cornell University (her MBA alma mater).

P.S. Never mind massaging the numbers, but not knowing the definition of CPM is puzzling, especially considering Mary has followed the Internet sector since 1993.

Lori says:

other possibilities, too

Without denying that the tweaking goes on, there is another possibility as well. Having worked on models such as this, I can tell you that the assumptions are rarely all one’s own. What usually happens is that you present your model to umpteen people who rank more highly than you in your organization, and then they argue and discuss the assumptions and eventually tell you what changes need to be made. After you do that you go through that process again, sometimes ad infinitum or until your deadline arrives. It is quite possible that the flak she got for her first bungle also generated a number of criticisms of her assumptions from within and without that required her to change them.

Spuds (profile) says:


This is tweaking… but there is a reason for it in most cases. In business, executives want to meet a target. Their target is that end number. 89 million, let’s say. So the executive says to the accountant… “What do we have to do to make that 89 million?” Then the tweaking begins.

We can charge our customers x per impression with y impressions per day.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...