Groupon Cuts Mason A Deal He Can't Refuse
Like many a defeated and depleted executive before him, Groupon co-founder and CEO Andrew Mason emailed his staff yesterday that he was leaving the company to “spend more time with my family.” Then, in his typically offbeat style, he did what most executives don’t: “Just kidding –- I was fired today,” he wrote.
Although the note was “for Groupon employees,” carrying the valediction “Love, Andrew,” Mason wrote that he was “posting it publicly since it will leak anyway.” He told employees that they are “doing amazing things,” allowed that “it's time to give Groupon a relief valve from the public noise” and told his former workers not to worry about him.
“I'm OK with having failed at this part of the journey” -- which would be the part where a promising business model actually gets executed and becomes a viable enterprise against mounting competition.
The dismissal was not a surprise. Mason had been “buying time” since late last year and dismal fourth-quarter results, as MediaPost’s Gavin O’Malley reported yesterday, sealed his execution. The growing mob shouting “off with his head” seemingly was pleased; stock quickly shot up as high as 12% to $5.10 in after-hours trading before receding, TechCrunch’s Colleen Taylor reports. The share price was at $4.72 at 6 a.m., up from a close of $4.53, which constituted a drop of 24% after Wednesday’s earning’s report.
“I view Mason as a visionary idea generator,” Stifel, Nicolaus analyst Jordan Rohan tells the New York Times’ David Streitfeld. “Few would argue with how impressive the Groupon organization was as it grew. However, at some point it became the overgrown toddler of the Internet -- operationally clumsy, not quite ready to make adult decisions.”
Mason was asked to “exit the company immediately” at a board meeting yesterday morning, according to a source who talked to the Wall Street Journal. Reportedly, “tensions had flared” between Mason and Groupon co-founder and chairman Eric Lefkofsky before the meeting, Evelyn M. Rusli, Geoffrey A. Fowler and John Letzing report. Lefkofsky had been “agitating for change” and “urged Mr. Mason to be more vocal in defending Groupon, which was dealing with a precipitous stock-price decline, one person has said."
Mason had left the building by the time Groupon conducted a company-wide meeting that was streamed to its distant outposts, the WSJ reports, presumably puttering around the house with an eye on the trending Twitter feed about his ouster. “Mr. Mason himself retweeted a comment that said: ‘First the pope and now Andrew Mason!?! Our esteemed leaders are falling like flies,’” the Times’ Streitfeld writes.
Some observers point out that Yahoo’s former CEO, Carol Bartz, was similarly forthcoming about her dismissal in September 2011, but she was, in fact, a tad more strident about it publicly in an exclusive interview with Fortune’s Patricia Sellers.
“Honesty and authenticity are so profoundly lacking in today’s leaders that it really is a thrill when a frank memo appears, like the one that freshly ousted Groupon CEO Andrew Mason penned Thursday evening,” writes Lillian Cunningham, the Washington Post’s “On Leadership” editor.
Authencity? Well, Mason has long been known as quirky. Reuters’ Poornima Gupta, Alexei Oreskovic and Malathi Nayak write that Mason “garnering props for [the letter's] self-deprecating style … should come as no surprise,” and then they lay out the evidence. Some of the anecdotes: Mason purportedly doing yoga in his underwear in a video posted to YouTube, his giving a pony to gazillionaire Michael Bloomberg and turning down an interview with the New York Times in 2010 on any topic other than “my other passion, building miniature dollhouses.”
The Chicago Tribune’s Ameet Sachdev and Robert Channick say that the resignation note is “filled with the same offbeat humor, charm and candor that defined his tenure as chief executive.” The company is headquartered in the Windy City, and the Tribune reporters observe that “Groupon's struggles have been stunning, and dispiriting, to many in Chicago because so many expectations were wrapped up in its early success.”
But, in addition to mounting competition “from imitators from LivingSocial to Amazon,” they point out that “consumers' appetite for heavily discounted deals on restaurants, yoga classes and pedicures has shrunk.”
Executive chairman Lefkofsky and AOL veteran and vice chairman Ted Leonsis will be sharing the steering wheel as the search for a new CEO is conducted. Neither is in consideration for the permanent role of jumpstarting the vehicle stalled on the Skyway –- a task that begs for a master mechanic.
“Many investors, joined by several Groupon analysts, don’t believe Mason was the core problem with the company, and they can only wish the interim CEOs luck in tackling its fundamental issues,” Therese Poletti writes in a MarketWatch commentary. “What CEO would want Mason’s job on a permanent basis is another question whose answer will only become clear in the coming weeks and months.”