Observed Signal · Mar 18, 2025 · Technical Release · Source: Quo Vadis News · Impact: 3/5 · Sentiment: Neutral
Normative Economics & Google's Game Moves
Quo Vadis publishes a working paper titled 'On Normative Economics and Google's Game Moves,' exploring hypothetical scenarios around opening YouTube’s ad inventory to external DSPs and its impact on Google’s display-ad assets and antitrust risk. The piece situates two intertwined subjects: Google's DOJ antitrust case in display advertising (Network Revenue) and a sum-of-parts discounted economic profit valuation of Google's network businesses. It estimates outside buyer values for Network components: Publisher Ad Server (GAM) at $2.1B, AdX at $6.3B, and DV360 at $4.7B, totaling about $13B. It also values YouTube at roughly $147B (discounted econ profit basis, excluding subscriber value) and notes YouTube’s leadership in CTV with a 19% five-year CAGR and 15% YoY growth in 2024. The paper proposes two potential moves for Google — divesting Network assets or opening YouTube to external DSPs — and invites community feedback via a public PDF and Google Doc, stressing theoretical analysis rather than investment advice.
Analytical industry analysis with potential implications for adtech valuations and antitrust considerations, not a confirmed industry-wide shift.
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Key Takeaways & Evidence Grounding
- The working paper is titled 'On Normative Economics and Google's Game Moves.'
- On a sum-of-parts discounted economic profit basis, Google's Network is valued at $13 billion to an outside buyer.
- Standalone component values: GAM standalone $2.1B; AdX $6.3B; DV360 $4.7B.
- YouTube’s fair market value is estimated at $147B (excluding YouTube subscriber value) on a discounted economic profit basis.
- YouTube is described as the largest CTV player with 19% CAGR over five years and 15% YoY in 2024; the paper discusses two game moves: selling Network assets and opening YouTube inventory to external DSPs.
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