Tag Archives: Andrew Mason

Next Steps For Groupon As Andrew Mason Departs

It was just a matter of “when,” but Groupon has finally relieved Andrew Mason of his CEO duties after a quarter in which Groupon widely missed its mark because of its very high expenses and serious international issues, despite growing 30 percent year over year. Vice Chair Ted Leonsis and Executive Chair Eric Lefkofsky will run the company until they find a new CEO for Groupon or perhaps, even sell it.

Groupon, of course, has been written off in some circles as a big fad that ultimately dis-served its SMB merchants– something we have never totally accepted. But the ongoing possibilities for Groupon are wide ranging.

The company isn’t currently sustainable, with its heavy sales-laden staffing (whoever said local is scaleable?) But just as #2 Living Social’s investors saw that it was more prudent to inject $110 million to keep it going for its next stage, Groupon, which is at least three times larger, is better off staying juiced for now.

It has massive merchant and consumer email lists, and a wide selection of B2B, scheduling, processing, mobile and loyalty technologies – plus a growing travel business, as well as a lower margin, Groupon Goods business. If its investors wanted to stay the course, it could certainly continue its march into Amazon-like ecommerce territory.

The elevation of Leonsis and Lefkofsky to acting co-chiefs has a lot of possibilities in itself. How about a couple of interesting, not-so-crazy scenarios? One is that Lekofsky could finally merge Groupon with his newer investment in Belly, the Groupon-like, Chicago-based loyalty play that has just celebrated its one millionth member.

More enticingly, in terms of scale, Leonsis could influence an acquisition of Groupon by American Express, which he serves as a board member. Amex has just opened up an ecommerce store as part of Amex Sync and needs to feed it.

Or Groupon could be sold to Amazon, which is investing heavily in the local deals space; or it could even be sold to Google, which had once offered $5 Billion for it. Perhaps Marissa Mayer at Yahoo will make a run for it. She was a major instigator of the Groupon negotiations as a Google exec.

As for Mason, he may not have been the ideal CEO of the relatively soul-less, deals department store that is currently Groupon. But he’s funny, and authentic, and has been a great spokesman for the “What do we do this weekend that is wild and offbeat” lifestyle that catapulted Groupon –and the deals space — into local’s biggest phenomenon ever.

Sometimes, Mason, reminds us, business isn’t merely about business. It’s about helping people live their lives. This is especially true at the local level in which Groupon has been a shining star.

Andrew Mason after his groundbreaking BIA/Kelsey Marketplaces keynote in March 2008

Groupon, Live Nation Team up for ‘The Live Email’

Groupon has moved closer to CEO Andrew Mason’s vision of being a “city guide” via “GrouponLive,” a new events source featuring various Live Nation events. “The Live email”, featuring last minute discounts, is being sent out to Ticketmaster’s regular opt-in list. It is also available to users who go to the site. Live Nation says GrouponLive will be a “local resource for Live Nation events, ranging from concerts, sports, theater, arts and other live events.”

Synergies between city guides and events companies have been tried before. Citysearch and TicketMaster had been tied together several years ago under IAC, which had merged the two companies. TicketMaster sought to send event-goers to nearby restaurants, bars, etc.

The new Groupon Live partnership could generate more traffic, building a better advertising base – Ticketmaster’s own email already sells advertising. It could also take advantage of Groupon’s transactional capabilities, moving Groupon more squarely against social event transactions companies such as Eventbrite.

Looking further out, it could also move Groupon into more of an events-listing direction, competing against companies such as Eventful, Zvents and others. For now, however, it only promises to showcase Live Nation events.

Groupon, McClatchy Team for Daily Deals in 28 Markets

Groupon announced today that it will work with McClatchy, the third largest newspaper chain, in 28 McClatchy markets. The rollout begins this month in Sacramento and Kansas City. Other McClatchy markets will be added over the next several months, possibly including titles in Ft. Worth, Miami, Charlotte and Raleigh.

Like Living Social’s earlier deal with The Washington Post, the deal is based on McClatchy’s powerful local promotion capabilities. Groupon deals will be promoted throughout newspaper websites in contextually relevant sections (i.e. dining). Print promotion, however, is not part of the deal at this point. Sales also aren’t part of the deal, which is non-exclusive. Other media companies can sign with Groupon both in McClatchy markets and outside of it.

Groupon appears very likely to announce other local media deals in the near future – a likelihood driven by the efforts of Business Development VP Sean Smyth, a longtime local media vet with Tribune, Metromix and other local media companies. In general, there is recognition that Groupon has developed a presence in several McClatchy markets without any brand assistance. Groupon will, however, develop custom versions specifically for McClatchy readers.

At our Marketplaces conference last March in San Diego, Groupon CEO Andrew Mason said that his early vision was to team with The Chicago Tribune, his hometown paper. But he soon realized that Groupon could roll out faster and with more editorial independence by working solo and relying primarily on telesales. Now, Groupon expects to surpass The Tribune’s circulation in Chicago by year end. But evidently, newspapers local promotion capabilities remain a strong incentive for partnerships.

McClatchy VP Chris Hendricks tells us that he sees a net plus for both companies by helping promote Groupon. “They’ve got their space,” but McClatchy offers Groupon more “entry points” to readers and deals, he says.

The deal also enables maximum flexibility for both companies. Conceivably, the Groupon deals could be included in a product suite, he says. The limited nature of the deal, and limited commitment, is also seen as a plus. “We have a lot of stuff going on,” says Hendricks. “An affiliate marketing program fits in better,” and “lets us get out of the gate.”

Marketplaces 2010: Groupon Founder Andrew Mason

Groupon Founder and CEO Andrew Mason talked about the roots of the “deal-a-day,” collective buying phenomenon and how he intends to protect has franchise against one hundred plus competitors during a keynote appearance at Marketplaces 2010 this week in San Diego.

Mason noted that Groupon launched in November 2008 and now has 3.5 million in 46 cities. More than 2.7 million Groupon coupons have been sold.

“We’re larger in daily distribution (in Chicago) than The Sun-Times. By the end of the year, we’ll be larger than The Chicago Tribune,” he notes. He thinks it is ironic that he actually wanted the site to work with companies like The Tribune. “It became apparent they couldn’t move at our pace,” he says.

The site is basically a spin-off from The Point, a crowd-based community site that has donefun things like trying to formulate a crowd based offer to buy the Cubs, or to make Election Day a naitonal holiday. Mason is forthright about building the new service to make money.

“Collective buying might seem like a simple concept,” said Mason. But many elements go into it.

In fact, the site really should be thought of as more of a “Trusted City Guide” that curates local business and has strong media values rather than a traditional coupon service. That’s why it is not really so easy to imitate, he believes – although many sites try. It won’t be the companies that merely ape Groupon that have a chance to ultimately beat it, he says.

Mason also notes that Groupon is choosy about which businesses seem interesting enough to be featured and it doesn’t allow businesses to repeat too often. It will also go for interesting businesses such as zero gravity flights, museum tours, tattoos or Ferrari Rentals over more pedestrian deals, even if the short term profit potential is limited. The site can do this because it doesn’t charge any upfront fees, instead charging between 30-50 percent of the purchase price of a Groupon coupon. Groupon handles the entire transaction and mails checks to merchants.

The site is also very quality conscious. Customers are guaranteed satisfaction with their purchase, and Mason says 1-2 percent have asked for their money back. “We have a super liberal return policy. We’re sticking with a model that people will behave well if we treat them well.”

Groupon also only solicits businesses that have three stars or more in terms of user ratings, presumably from popular services such as Yelp. The site has no premise sales or local sales, instead relying on call center operations in Chicago.

Businesses also tend to be pleased because customers tend to spend significantly more than the value of a Groupon. Ninety-eight percent want to be featured again, says Mason. But the deal-a-day model has real limitations in terms of inventory, and in more mature cities, there is a backlog of 100+ businesses that want to be featured.

My colleague Charles Laughlin has his own take on the Groupon keynote at BIA/Kelsey’s Local Media Watch.

Groupon’s Andew Mason with The Local Onliner