Groupon CEO Andrew Mason's deal expires
CEO Andrew Mason.(Photo: Groupon)
SAN FRANCISCO — Troubled deals giant Groupon has ousted CEO Andrew Mason, ending months of speculation that his job was in jeopardy.
The Chicago-based online deals pioneer, which famously spurned a $6 billion bid from Google, was founded by Mason and went public in 2011 with a valuation approaching $13 billion.
Shares have fallen sharply since the IPO and are now off 77% from their 52-week high of nearly $20. Groupon has struggled to gain traction amid customer and merchant dissatisfaction.
"After four-and-a-half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding -- I was fired today. If you're wondering why ... you haven't been paying attention," Mason said in a departure memo.
Rumors have circulated for months that Mason's replacement was imminent amid growing concerns for the company's future. The deals company reported disappointing earnings Wednesday that sent shares 25% lower in after-hours trading, increasing pressures. Shares of Groupon jumped 5.5% in after-hours trading on the news of Mason's removal.
The online coupon business, or daily deals business, shot off like a rocket a few years ago with companies promising another Google-like category of business.
Facebook, Google and Amazon -- through a $200 million investment in deals site LivingSocial -- piled into the field. Rival LivingSocial raised anxiety about the online deals business last month in posting a $650 million net loss for last year.
"The honeymoon is over for group deals," IDC analyst Karsten Weide says. "At some point, the bottom line speaks loudly and I would assume that a lot of them will go out of business."
Mason struck a sympathetic pose, while wearing a bib and sipping cioppino, in a rare interview in September with USA TODAY over lunch.
While gently defending his track record, he said the key to the daily-deal company's success was for it to go "deeper" into an estimated $3 trillion local-commerce market. Groupon's new pitch then -- an iPhone and iPod Touch app, coupled with a free credit card reader/swipe or $100 durable smartphone case with built-in swipe -- would let restaurants, salons and other local businesses accept credit card payments at a lower rate than other providers.
"We're not trying to make money hand over fist," Mason said then. "The goal is to enhance (services) for daily deals."