Mary is Meeker than yesterday on revenue estimates?

I’m still digesting this amazing story by Henry Blodgett  about how Morgan Stanley analyst Mary Meeker’s seems to have 1) inadvertently miscalculated YouTube revenue potentials by a factor of *1000* and then,  adding insult to injured fuzzy math, seems to have reworked the calculation to “back into” a new number that is closer to the original than the one you’d get from the original assumptions.

I need to read her side of this but Blodget is no stranger to the perils of fuzzy math and I remain amazed at how few in the media question how the big players estimate this stuff.  This certainly indicates that for many years big players have used bogus valuations, fueled by the casino-like buying behavior of clients.     Without more critical review this will keep on trucking for some time.

4 thoughts on “Mary is Meeker than yesterday on revenue estimates?

  1. Probably several factors at work here:
    Many people don’t read the fine print because their eyes sort of glaze over at the point at which they would have to take their shoes off to do the math. If it gets beyond their customary fingers and toes they tend to gloss over it and just focus on the bottom line, no matter how absurd the figure actually is.

    Alot of it is the question of accepted figures. The famed “cost of developing a drug” was a humungous figure that was bandied about and cited all over the darn place but anyone who asked for a copy of the article was told ‘its in draft form and can’t be released’. Meanwhile all the “consultants” were ping-ponging the citation back and forth and now that cost is so well accepted that there ain’t nothing going to dislodge it from the accepted knowledge of the public.

    The most commonly made mistake in drug administration is misplacing the decimal point!

    So if the situation is a mergers and acquisition game wherein ‘win’ means get the merger to take place … the math may be fuzzy and the thinking may indeed be fuzzy, but the acquisition has to go through for anyone to realize their humungous consultancy fees. Someday a mistake will be made and everyone will know it really was a mistake: the error will have been in the wrong direction!

    We have all heard the “how much do you want it to be” response. Now its often a case of “how uncritically accepted do you want it to be”.

  2. By the way, as long as we are dealing in this thread with paying close attention to details:

    Why on earth is it Henry Blodgett in the link above, but ‘Bill Blodget’ in the mouseover text? Henry became Bill and Two “T”s became One “T”. Or am I the one who has made a mistake and needs a second cup of coffee to wake up?

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