Amid a grim outlook for the current quarter’s revenues, Groupon has opted to fire their CEO, Andrew Mason and have embarked on a quest for a new direction.
Countless people have signed up for the e-commerce sensation known as Groupon. The premise is quite simple. By registering with the Groupon site, a user will receive daily deals and coupons. These deals often consist of spa packages, sporting event tickets, or even a full course meal at a popular restaurant. The site uses the user’s specific location to pinpoint what deals are being offered closest to their home and some coupons can guarantee discounted services of 50% or more.
When Groupon first hit the Internet, house wives and young entrepreneurs alike were signing up with haste to get a chance to try out a discounted service. Now, as more and more e-commerce businesses pop-up, investors in Groupon have begun to worry about the revenue stream generated from daily coupon email blasts.
Groupon Inc, became a publicly traded company in November of 20111and primarily makes money by taking a slice of the profits that they get from selling online coupons for other businesses. Investors have had a growing concern that the company will not be able to remain sustainable as the idea of Internet couponing looses steam. Although Groupon was the first of it’s kind and burst onto the e-commerce scene in 2008. Since it’s inception, many other specialty couponing sites have sprung up and caused unexpected completion for the once thriving company. Sites like crowdseats.com, which offer it’s users exclusive deals on extra seating at collegiate and sporting events. Groupon has suffered criticism from business professional as it employs a huge amount of people and spends copious amounts on Internet marketing initiatives.
As more and more companies tap into this industry, Groupon’s stock has suffered losses of around 77% of their initial value. After the company made the announcement that they were going to fire their once beloved CEO, Groupon stock saw a rise of nearly 4% as investors seemed to approve of the change. CEO Andrew Mason took responsibility for the company’s disappointing numbers in a letter he released after being fired. Without any bitter resonance, he also stated that a fresh CEO would be a good addition to the company as he felt their staff was already doing great work. He closed the letter by stating that he was proud of the things Groupon has accomplished thus far. Although no replacement has been appointed as of yet, the company is aggressively looking for a new chief to steer the company in the right direction.