[shostack]

Can you speak at all to what sort of modeling work is done around this sort of major partnership? I'm really curious how many people are involved in that sort of exercise at that level and how clean the data is, what sorts of data are used, etc.

[exelius]

I do this kind of work! I don’t know at Google, but typically there will be some amount of third-party due diligence for deals over a certain size / risk profile. Some companies have an internal strategic deals group; which I would assume Google likely does (but probably didn’t back then).

If both companies’ data needs to be combined an analyzed, they usually bring in an outside deals consulting firm. Those teams tend to be very small due to the sensitive nature of the discussions involved — usually 2 or 3 people (backed by a large shared support staff and tooling) over the course of a few weeks.

Often the data used is a combination of proprietary data from both companies, commercially sourced data or proprietary data platforms built by the consulting companies. Deals are a big, sensitive, relationship-driven business.

[johnrgrace]

  It's often one guy with a spreadsheet, and 1-2 people to review the spreadsheet and a few business people to validate assumptions.  The modeling is easy, getting the assumptions right is hard.                                
  To be honest, if you're skilled very simple models that you can do in your head or in a few minutes usually give you a perfectly good answer.  The more complex exhaustive models are usually there to make sure you didn't overlook something or 20 small inputs all cross multiplied to throw your answer off.                             
    Getting the answer exactly right also doesn't matter, if you make $90m in profit off a deal or $100m your going to do it.  What you are most concerned about is making sure that you don't lose money and what factors would push you to do that.