Right in the middle of a complete strategic reinvention, on Friday LivingSocial CEO Tim O'Shaughnessy said he was leaving the company.
"I remain 100% convinced the ingredients for success are here,” O'Shaughnessy wrote in an email to employees. “Now is the best time to transition leadership -- when that full set of ingredients is available to be used most effectively to shape the company’s future."
O’Shaughnessy is expected to stay on as CEO until a replacement is found.
Distancing itself from daily deals, LivingSocial recently announced plans to refocus its business model on e-commerce tools for retailers. To that end, the once high-flying startup last September introduced a new set of tools to help merchants analyze their sales and campaigns.
As evidenced by Groupon’s highly publicized troubles, daily deals have lost their luster in recent years.
As of last summer, among 900 small- and medium-sized businesses surveyed by Borrell Associates, a whopping 77% reported zero participation with daily deal programs. Of those SMBs still daily dealing, only half report being satisfied with the results.
“The whole [daily deal] sector is toast,” Greg Harmon, senior research analyst at Borrell Associates, recently told Online Media Daily. “Consumers like the deals, but they’re too much trouble for businesses."
The decline of daily deals has hit LivingSocial particularly hard. This past summer, the company closed its Seattle and New York offices and shut down its local events division.
Yet as O'Shaughnessy professed in his letter to employees on Friday: “We now have the most stable and healthy business that we have ever had, and the luxury of having hundreds of millions of dollars in the bank to take us to the next level.”
Still sending emails to subscribers, the company has been revamping its search box on its site and app in a move to help consumers connect with offers through site and mobile search.
O'Shaughnessy is expected to remain on LivingSocial’s board of directors.
Amazon invested a $175 million LivingSocial in 2010.