Photo: Flickr/Hubert Burda Media
Andrew Mason just sent a memo to his fellow Groupon employees, firing back at the many criticisms of the company. AllThingsD’s Kara Swisher got the scoop. In the memo, Mason makes a few points:
- Revenue is growing like gangbusters.
- NO, dammit, Groupon is not running out of cash.
- Adjusted CSOI, the weird accounting metric Groupon showed off in its filing, actually makes sense. He says Groupon’s marketing should be counted as a capital expense because it gets people to sign up for Groupon emails and then they can be harvested: it’s a one time expense instead of a continuous expense like most marketing. (We tend to agree with this. It’s a different way of looking at the business, and there’s some merit to having it alongside more standard GAAP measures.)
- At some point, Groupon is going to stop spending so damn much on marketing, and (presumably) will therefore end up profitable. Now, though, it needs to spend heavily to stay ahead of its rivals. Speaking of which…
- All of Groupon’s rivals suck. Google Offers isn’t going anywhere, neither is Yelp. “Living Social’s U.S. local business is about 1/3rd our size in revenue.” Zing!
- Groupon’s new businesses are crushing it. Groupon is starting to sell travel and consumer goods and things like that on top of local business, and that’s doing really well. Groupon Now is also doing well.
- Groupon China is doing really well. What Mason is saying here, after reports on Groupon China’s demise, reading between the lines, is that when they went to China they hired as fast as possible, so of course they’re also firing a bunch of people because they went for hiring fast, not hiring well, but that doesn’t mean Groupon China is in any serious trouble.
- Groupon Korea is also doing super well! Of course it is, the market leader in that region is growing even faster than Groupon was at a similar point in its history.
- Groupon’s team is awesome, the head of Groupon’s team says.
Without naming him, the memo seems to hit back specifically at an assessment made by several folks, including our own Henry Blodget, that Groupon is close to running low on cash. Mason writes that that was the last straw that got him to write.
Interestingly, he never addresses the impact of insider selling on Groupon’s cash position.
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