News just in..Groupon board fired Groupon’s founder and CEO Andrew Mason.

Pic Courtesy: News.Yahoo.com

The outgoing CEO quietly leaked the memo to public this afternoon ( see the memo contents below ):

People of Groupon,

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. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love, 
Andrew

If you may ask, what culminated in to this decision?

On Wednesday, Groupon declared that it missed the earnings forecast and lowered the guidance. This triggered a massive sale of its shares in which the stock lost 12% of its price and overall last 3/4 of the original IPO listing price. This wiped out lot of market share. Added to it, Groupon predicted Q1 2013 earnings between 560-610 million dollars whereas analysts expected at least 650 million dollars.

While Andrew Jason tried his best to explain the situation, it did not go well with the board of directors who “fired” him couple of hours ago.

This comes out as a big blow for #dailydeals industry which has seen overvaluations of their respective companies.

Its not only Groupon, LivingSocial in trouble too..

Elsewhere, LivingSocial had to take emergency funding of 110 million dollars to sustain its growth and take care of capital requirements. LivingSocial’s CEO also reported that the bonuses to all the employees stand cancelled.

How does this affect Daily Deals Industry?

The current conditions clearly indicate a market correction for the daily deals industry. With the top daily deal sites investing heavily on the marketing and sales and pushing the merchants to offer deep discounts and charging high commission structure, merchants are thinking twice to take the daily deals route as another form of advertising their products.

However, it should be noted that , with the penetration of technologies and the awareness created about daily deals to the consumer, consumer still stands to gain a lot from the daily deals.

The correction also helps the merchants to take strategic decisions on  running daily deals that could help them to convert the customers into repeat customers.

Asia is well poised to learn from these corrections!

As much as the markets are volatile in Americas and Europe, you may notice that #DailyDeals are still in nascent stage in Asia and are poised for a big growth. The lessons learnt from the current market correction should help the merchants in Asia to take nice decisions and the daily deal sites in Asia to work out realistic deals that are a win-win for both merchant and the customer.

We just learnt that China’s leading Search engine Baidu quietly launched a daily deal site ( currently open for Beijing customers ).

In Summary…

As the markets reconcile , the consumer is well poised to benefit from these daily deals.

Have a nice weekend and happy DEALSOCLing at #dealsocl

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