No amount of clever copywriting can cover up the fact that Groupon is at a crossroads and that its CEO Andrew Mason -– described in one piece as both “‘ridiculous, completely unserious and absurd’ as well as ‘intelligent, passionate and organized’” -– is in the crosshairs of analysts both inside and outside the company.
“Wall Street has cooled on the five-year-old Internet company once touted for transforming local business advertising by marketing Internet discounts on everything from spa treatments to dining,” writes Reuter’s Alistair Barr. The problem? The “fever for daily deals has cooled among consumers and merchants” and “Europe has been a particular problem.”
The bottom line is that Groupon shares are down upwards of 75% this year, and reports are surfacing that question the entrepreneur’s ability to “grow” the company. Mason was a music major at Northwestern, deft at the piano and brimming with ideas but not a marketer or manager to the corporation born.
Bloomberg’s Douglas MacMillan offers an analogy between Google’s early years, where co-founders Larry Page and Sergey Brin yielded operational control to Eric Schmidt, and Groupon.
“It’s an oft-told, oft-expected story that the genius entrepreneur steps aside when he or she succeeds at building a company big enough to need an experienced CEO,” Erik Gordon, clinical assistant professor at the Stephen M. Ross School of Business at the University of Michigan, tells MacMillan. “The Google guys did it, and the results were spectacular.”
But after meeting yesterday, Groupon’s board didn’t do it, with a spokesman offering a tepid statement of “carry on” following the Chicago get-together: “"The meeting is over, and the board and management team are keenly focused on the performance of the company. And they are all working together with their heads down to achieve Groupon's objectives."
Quoth Business Insider’s Henry Blodgett: “Not exactly the same as saying, ‘We have reached a decision: Mason is our man.’”
But Mason has evidently bought some time. “His fate will be determined on how the company does over the next year, which I remain cautious about,” Ascendiant Capital Markets analyst Edward Woo tells the Chicago Sun-Times’ Sandra Guy.
The day before, Blodgett had bluntly asked Mason at the Business Insider Ignition conference if he thought he was going to be fired after reports surfaced in several media, starting with Karen Swisher’s “exclusive” in All Things D, that he had lost the support of the board -– at least according to anonymous inside sources.
Swisher had written that the rift “centered on Mason’s co-founder and Groupon executive chairman, Eric Lefkofsky, and board member and co-founder Brad Keywell. They, as well as several other directors, have been urging Mason to be more aggressive and public about the company’s turnaround efforts, sources said.”
Mustering his inner aggressiveness, Mason shot back at Blodgett: “Here’s a news flash, our stock is down 80%. It would be weird if the board wasn’t asking if I was the right guy to do the job.” He said he’d fire himself if he didn’t think he was the “right guy for the job.” And later, he asserted to Blodgett, "I don't read what you guys write."
Patrick Clark applauded Mason’s thick skin in BetaBeat, saying that he “presented as self-assured.” And even as he acknowledged the company’s struggles, he took the occasion to trumpet positive developments such as “38% year-over-year growth in gross billings in North America, high volume of mobile transactions and a never-ending search -- including new forays into travel and shipping goods directly to people’s houses -- for ways to make money.”
Blodgett himself wrote a piece laying out both the “fire-Mason case” as well as the “give-Mason-more-time case” with compelling bullet points on both sides of the ledger before concluding that the decision should really be up to … Andrew Mason.
“If Andrew Mason wants to fight to keep his job, commits to learning more about how to run a multi-national corporation and communicate better with Wall Street and the media, and remains excited and passionate about his job, then he should be given more time,” Blodgett wrote. “Not an indefinite amount of time, but more time.”
TechCrunch’s Coleen Taylor, meanwhile, writes a convincing piece that Mason “is not the problem” at Groupon, while acknowledging that it’s “a bit harder to pinpoint” exactly what the problem is.
“While a high-profile dismissal might make for a strong statement, it is not necessarily a real solution,” Taylor observes. “In this particular case it could only make things worse, especially if no other actions are being taken. “
For now, in any event, the deal remains on for Mason.