Sad To Say, But Andrew Mason Is Probably Not Going To Be Groupon's CEO Much Longer

Andrew Mason at NASDAQ during Groupon IPO


Until today’s earnings announcement, things were looking good for Andrew Mason, the founder and CEO of Groupon.The daily-deal company’s stock had more than doubled from where it had bottomed out in November. It crossed $5—an important point for investor psychology and institutional support, since some mutual funds can’t buy stocks trading below that point—early in the year.

In after-hours trading, it gave most of those gains up.

There’s been a lot of speculation about whether Andrew Mason will keep his job. The last word from the company was that the board and management were heads-down working on turning the company around.

After this earnings disappointment and a dismal, low-growth outlook for the first quarter, it’s not clear why Mason is the right person to do that.

The only thing that’s going well for Groupon is its e-commerce business, Groupon Goods. And Groupon has an executive, COO Kal Raman, who knows e-commerce well. He worked at Amazon and ran (Groupon has also been quietly staffing up with a host of Amazon veterans.)

So it’s pretty obvious what Groupon needs to do: Milk the declining daily-deals business for cash flow by continuing to cut marketing costs; invest in Groupon Goods; and fix or dump its European business.

What you’re left with is an interesting e-commerce business with a well-known brand, one that can potentially sidestep Amazon by focusing on surprising consumers with great one-off deals and unusual inventory. (By the time Amazon gets around to price-matching Groupon offerings, Groupon will have moved on to selling other stuff.)

The question is whether it makes sense for Groupon’s quirky founder to run that business, or an experienced e-commerce executive.

By the stock price, it seems like the market is voting against Mason.

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