Reuters blog archive

from The Great Debate UK:

If only more CEOs were like Andrew Mason

By Kathleen Brooks. The opinions expressed are her own.

Groupon’s ex-CEO won’t be remembered for his stewardship of the internet deal company, but he is likely to go down in history as writing one of the best and most honest goodbye memos of all time when he was sacked at the end of last week.

Two things in the memo to Groupon employees announcing his departure stand out: humour and honesty. This has to be the best opening line in the history of the departure letter: “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.” How many times have we heard CEOs, politicians and other leaders use the “family” card to disguise the fact they have been unceremoniously dumped from their role of authority?

Mason didn’t stop there. Rather than lash out at the decision to replace him he actually agrees with it. He told readers if his firing was a shock then they haven’t been paying attention. Indeed Groupon has been mired in troubles for the last two-and-a-half years; in the last 12 months the share price has fallen a whopping 75%, from nearly $20 per share to just below $5 today. One could argue that Mason should have left sooner, though we have seen other CEOs continue to stay on to the bitter end – think of Dick Fuld at Lehman Brothers or the rotten crew at Enron.

Mason listed the errors he was responsible for that undoubtedly hurt the company’s share price, from using controversial metrics to rate performance that stoked the ire of regulators, to missing growth expectations. Mason was clear: “As CEO, I am accountable,” he wrote.

from Lucy P. Marcus:

Groupon’s fate hinges on the boardroom

Andrew Mason, the chief executive officer of Groupon, has, in his own words, been fired. His resignation letter has been described in the press as charming, but the market seemed to think it was simply about time. Shares in Groupon went up more than 10 percent following the announcement on Thursday.

Firing Mason has taken too long, and the board has a lot of work to do. Groupon, though it might not have always acted like it, is a grown-up business with an entire ecosystem that depends on it, and with that comes responsibility. I’m not just talking about the investors, I’m talking about its more than 11,000 employees in 48 countries, its global network of businesses – from mom-and-pop stores to big organizations like Expedia ‑ that depend on a reliable service that has often in the past let them down, along with the users of Groupon coupons. All of them need to know they are dealing with a company that is reliable and will honor their purchases.

from Breakingviews:

U.S. venture capital needs a reboot

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

U.S. venture capital needs a reboot. A decade of insufficient shrinkage hasn’t fixed wimpy performance. At 6.1 percent annually over 10 years to September, according to Cambridge Associates and the National Venture Capital Association, VC fund returns undershoot boring stock indexes like the Nasdaq and the Russell 2000.

from Breakingviews:

Groupon discounts dual-class share structures

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Groupon’s melodrama is discounting dual-class share structures. Chief Executive Andrew Mason and Chairman Eric Lefkofsky appear locked in a dysfunctional battle over how to run the flailing company. The board is keeping Mason at the helm, but the fighting probably isn’t over. Super-voting shares like the ones both men own are meant to give founders flexibility. But Groupon is a reminder of just how dangerous the arrangement can be.

from Breakingviews:

Review: Groupon’s baby CEO grows up – to a point

By Megan Miller
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Few companies have grown from an idea to a nearly $17 billion company as swiftly as Groupon, the daily deals website. Frank Sennett’s new book, “Groupon’s Biggest Deal Ever,” gives a blow-by-blow account of the startup’s rapid ascent, including its founder’s audacious rejection of a $6 billion takeover bid by Google two years ago. What Sennett’s book fails to deliver, however, is an insight into how Groupon can sustain its position.

from Breakingviews:

Groupon now needs to dig more than build

By Rob Cox
This column appears in the June 11 issue of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Groupon founder Andrew Mason has built a castle. His internet coupon empire will harvest some $2.4 billion in sales this year thanks to rapid growth in its wittily-worded email offers for discount pole-dancing lessons and two-for-one chicken parmesans. Mason’s next trick needs to be digging a moat around his business. That’s arguably tougher, and means being more like online restaurant booking outfit OpenTable - or buying it.

from Felix Salmon:

How Groupon accounts for its deals

It's another bad day for Groupon: not only is Andrew Ross Sorkin using the company as Exhibit A in his opposition to the JOBS Act, but more worryingly the WSJ is now reporting that the SEC is examining the earnings revision which Groupon announced yesterday.

Vipal Monga has explained exactly what the problem is here, but his story is very hard to access online, so I'll try to summarize. The issue at hand is that of refunds, and how they're accounted for. Let's say that Groupon has managed to sell 240 coupons for "cool sculpting", at $500 apiece. That's a total of $120,000. The coupons expire on September 19, in six months' time.

from MediaFile:

Tech wrap: Apple teases “Mountain Lion”

Apple released details on the successor to its "Lion" operating system for Mac computers, due out late this summer. OS X 10.8, dubbed "Mountain Lion," will inherit features already running on iPhones and iPads such as iMessage, Notification Center and AirPlay mirroring, according to an Apple press release. Game Center will give Mac users the opportunity to square off against gamers on iOS devices as well as other Mac users. A new feature called "Gatekeeper" is meant to give OS X users more control over what apps can be downloaded onto their Macs, further distinguishing Apple-approved apps from third-party ones. The plan to introduce more iOS functions to Apple's desktop and laptop OS comes as Microsoft prepares to make its desktop applications more mobile with a rumored fall release of Windows 8.

Four months after one of Japan's biggest corporate scandals, police and prosecutors arrested seven men, including the former president of Olympus and ex-bankers, over their role in a $1.7 billion accounting fraud at the medical equipment and camera maker. Three former executives arrested, ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada, had been identified by an investigative panel, commissioned by Olympus, as the main culprits in the fraud, seeking to delay the reckoning from risky investments made in the late-1980's bubble economy.

from Breakingviews:

Groupon’s growth spurt nearing the end

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Groupon’s growth spurt is nearing its end. The newly-public online U.S. coupon firm increased sales five-fold in 2011 and even turned slightly profitable. But its first results since the initial public offering last November, announced on Wednesday after markets closed, also show revenue growth slowed for a fifth consecutive quarter. Groupon will have to get a move-on to justify its $15 billion valuation.

from MediaFile:

Tech wrap: RIM co-CEOs seen losing chairman role

RIM is close to a decision on stripping its co-chief executives of their other shared role as chairman of the board, The National Post newspaper said, a change that could meet a key demand from angry and disillusioned investors. The Post's sources said Barbara Stymiest, currently an independent member of RIM's board, is leading the race to replace Mike Lazaridis and Jim Balsillie in the chairmanship. RIM shares jumped more than 7 percent on the news. But some analysts doubted Stymiest, if named to the chairmanship, would actually assume the transformational role that activist shareholders are calling for.

Groupon shares closed the day down 6.6 percent after a Susquehanna Financial Group - Yipit survey of almost 400 merchants found that while 8 out of 10 merchants enjoyed working with daily deal companies such as Groupon and LivingSocial, 52 percent were not planning to feature deals in the next six months and nearly 24 percent intended to feature only one deal during the same period.