PayPal today announced Cash for Registers to encourage merchants to switch to PayPal-powered point-of-sale solutions. The program is part of the payment giant’s bid to be the kingpin among local merchants looking for lower-cost ways of accepting credit card payments. The announcement comes on the same day that Square launched Stand to complement its Square register product on iPad tablets and Groupon expanded and rebranded its mobile point-of-sale solution as Breadcrumb.

In exchange for local retailers handing in their “dusty old cash registers” for PayPal’s services, the eBay-owned company is offering to waive credit, debit, check and PayPal-processing fees for the remainder of 2013 as well as free advertising for participating merchants in the process. As with the offerings launched today by PayPal’s two competitors, this offer is only valid in the U.S. for now.

David Marcus, the president of PayPal who has been the driver of the company’s push into mobile commerce, noted that the program begins in June when the company will reveal more details on the exact terms of the offer, such as whether there will be a cap on how much can be processed with no fee this year. Although PayPal Here is probably best known as one of the many services out there that uses a dongle attached to a smartphone to turn it into a card reader, the company is pushing deeper into the market by offering a bigger suite of services and devices to run them — much like Square and Groupon announced today.

In PayPal’s case, this includes a merchant app for iPad, an iPad stand, a cash drawer and printer. Part of the program will also involve PayPal promoting the sale of these products, which are made by a number of companies including Erply, Leaf, NCR, ShopKeep and others.

In fact, perhaps as a swipe at rivals like Square, Marcus plays up the fact that PayPal itself is not driving most of the hardware developments itself: “At PayPal we’ve spent a long time listening to small businesses and retailers of all sizes, and we came to the conclusion that no one company can cater to the needs of all industries,” he notes in a blog post. “That’s why we have handpicked select partners that are each best-in-class in their respective categories.”

Marcus notes that there will be more PayPal Here hardware partners announced soon.

On top of the free processing fees, PayPal is also offering another lure to merchants: free marketing to the company’s 55-million-plus U.S. customer base, noting which places local to them are PayPal- and Here-ready (presumably via the PayPal app). This is not unlike the Square Directory that Square has been offering to consumers as it pushes further into Foursquare territory as the platform for local search.

Groupon is once again expanding its portfolio of mobile payment services, putting it in closer competition with the likes of Square and PayPal’s here targeting local merchants: today it has released Groupon POS, which appears to be an iPad-specific version of its mobile payments service aimed at local merchants, working as a dashboard to make and track payments.

This is the latest development in Groupon’s payments strategy and helps fill out founder and now-ex-CEO Andrew Mason’s strategy of Groupon becoming the “operating system for local commerce.” It shows that while Mason is now gone, the direction that he envisioned for how the company would diversify beyond daily deals remains.

It is also a sign of how the company is continuing to push mobile services. Last week, in its Q1 earnings report, Groupon noted that it had 41.7 million active users (meaning those that have purchased a Groupon offer in the last 12 months). In North America, still the company’s largest single market, some 45% of transactions were completed on mobile devices, up from 30% a year ago. In Q1, the company said that more than 7 million people downloaded Groupon mobile apps worldwide.

The Groupon POS iPad app is the fourth of Groupon’s mobile payments services. Last year, Groupon took the plunge into mobile commerce with the purchase of Breadcrumb, a point-of-sale iPad app for restaurants to help manage customer orders and payments, as well as seating plans, employee timesheets and more.

Later it expanded that with payments for other businesses in its Groupon Merchants app for iPhone in September 2012 and then Android in January 2013. Both of these use a Square-like dongle to accept card payments via a mobile handset.

The Groupon POS app appears to be a simplified, more generalized version, of restaurant-focused Breadcrumb: “Groupon POS works for a wide variety of merchants from cafes and delis, to salons, spas, and florists,” the company writes in its app description in Apple’s App Store.

Like Breadcrumb, Groupon POS integrates with the dongle-based Groupon Payments offering in the merchant apps. Also like Breadcrumb, it can work alongside an “optional cash drawer and printer to automate and simplify your point of sale.” It’s not clear if Groupon plans to ship Groupon POS along with these extra devices as part of its promotion of the new app (it did this with Breadcrumb back in October 2012).

While Groupon is trying to match companies like Square on a product-for-product basis, it is looking to be competition-busting (and merchant-attractive) when it comes to transaction fees.

The fees that Groupon charges Groupon Merchants for Payments are 1.8% on Visa, MasterCard and Discover when swiped, 2.3% when keyed in, plus $0.15 for each transaction. American Express pricing is more complicated as it is “determined by American Express based on your industry category.” The rates range from 2.3%-3.5% (swiped) and $0.00 to $0.15 per transaction, says Groupon. For non-Groupon Merchants, the fees are higher: 2.2% when MasterCard, Visa and Discover are swiped, plus $0.15 per transaction. Square meanwhile has two options: a flat 2.75% fee per swipe, or $275 per month with no fees per swipe — with the latter aimed at higher-volume users, or those who like to gamble that they might be.

Like Breadcrumb, Groupon POS appears to be only available in the U.S. for now. We have reached out to Groupon for more details about Groupon POS.

Update: Groupon’s now pulled the app, an early verion that slipped out unexpectedly, and a spokesperson tells me that they are launching a permanent version tomorrow. We’ll update with a new post and new details then.

H/T Ouriel Ohayon

Groupon just reported its earnings for its first financial quarter of 2013. The company, which is still looking for a new CEO after the ouster of Andrew Mason in February, posted a $0.01 loss per share but says its non-GAAP EPS, excluding stock-based compensations, was $0.03. Its revenue was significantly higher than expected with $601.4 million in sales, compared to $0.02 earnings per share (EPS) on $559.3 million of revenue in the year-ago quarter.

Wall Street clearly likes these numbers. The stock is already up over 11 percent and currently trading around $6.23.

The expectation among financial analysts was that the company would report a year-over-year sales growth of 5.3 percent and an EPS of $0.03 on revenue of $588.92 million for this quarter (with a very optimistic high estimate of $618.5).

Last quarter, Groupon reported $638.8 million revenue, buoyed by a strong holiday season, but the company still posted an operating loss of $19.9 million and a loss per share of $0.12.

“We are encouraged by our results, as our local revenues accelerated and our margins improved over the prior quarter,” said Eric Lefkofsky, Chairman and co-CEO of Groupon. “We had record mobile performance as 45 percent of our North American transactions came from mobile in March, and more than 7 million people downloaded our apps in the quarter.”

One of the main indicators for Groupon’s health has long been gross billings – a reflection of how much money the company has collected from its customers for Groupons it has sold. Last quarter, gross billings increased 24 percent to $1.52 billion. Gross billing for this quarter was $1.41 billion, and the company says it has $1.2 billion in cash and cash equivalents.

In the last quarter, Groupon also reported that it had 41 million active customers, up 22 percent quarter-over-quarter and that it was handling about 37,000 active deals at any given time. In the last quarter, Groupon says the number of active customers grew to 41.7 million – a 13 percent year-over-year growth but just a minor increase from the last quarter.

Groupon has obviously been through a somewhat tumultuous time recently. The company’s ouster of CEO Andrew Mason after a number of disappointing quarters, however, seems to have brought some stability back to the company. Its share price remains low, though it’s up from its all-time low of $2.60. Currently, the stock is trading at around $5.60.

After Mason’s exit, Lefkofsky and vice chairman Ted Loensis were appointed to the company’s newly created Office of the Chief Executive as interim CEOs. The company has yet to announce a permanent replacement for Mason.

From the release:

First Quarter Operating Highlights

• Global units: Consolidated units, defined as vouchers and products ordered before cancellations and refunds, increased 4% year-over-year to 45 million. North America units increased 37%, and International units decreased 18%.
• Active deals: As of March 31, 2013, the number of active deals in North America increased to nearly 40,000, compared with nearly 37,000 at the end of the fourth quarter 2012.
• Active customers: Active customers, or customers that have purchased a Groupon within the last twelve months, grew 13% year-over-year, to 41.7 million as of March 31, 2013, comprising 18.2 million in North America, and 23.5 million in International.
• Customer spend: Trailing twelve month billings per average active customer decreased to $138 from $144 in the fourth quarter 2012, related primarily to seasonal strength in the fourth quarter holiday period.
• Mobile: In March 2013, 45% of North American transactions were completed on mobile devices, compared with nearly 30% in March 2012. In the first quarter 2013, more than 7 million people downloaded Groupon mobile apps worldwide.
• Marketplace: The rollout of Groupon’s marketplace (”Pull”) continued to gain momentum, as email accounted for less than 45% of North American transactions in the first quarter 2013.

The daily deals hype around Groupon, LivingSocial and all of their clones has markedly cooled down over the last few months, but that isn’t stopping Microsoft from launching Bing Offers, a new local deals aggregator for the U.S. market, today. The odd thing about this launch is that Bing previously offered a very similar feature called Bing Deals since 2011 – a service that now seems to be gone.

As a Microsoft spokesperson told me, Bing Deals went through “a number of iterations” over the years, and Bing Offers is essentially the next version of Bing Deals. As far as I can see, Bing Deals’ emphasis was on aggregating the best deals from across the web. Bing Offers puts its focus more on local deals, but it also features a number of national offers, as well.

Bing Offers, the company says, will aggregate deals from “a broad set of partners, including many of the leading local deal providers.” Microsoft hasn’t made a full list of partners available, but I’m seeing offers from LivingSocial, Groupon (via Yipit), Spotted Fox, DoubleTakeDeals and a number of other smaller providers.

The service features the same kind of flat design that’s now the hallmark of most of Microsoft’s products and as a daily deals aggregator, it’s actually quite nice. You can browse offers by categories (food, activities, health and fitness, etc.) and, as Microsoft stresses, “the Bing Offers experience works seamlessly across tablets, mobile devices, and PCs, so you can access great deals regardless of where you are.”

Groupon’s VP of mobile, David Katz, says that it has been “business as usual” at the daily deals company since the dramatic departure of founder/CEO Andrew Mason. “We’re still just focused on shipping new stuff,” Katz told TechCrunch in an interview. Today, that includes news of updates to Groupon’s iPhone and Android apps: it is adding a universal search feature that will let consumers use the apps to search for Marketplace deals that are available nearby, covering not just local discounts that are time-sensitive but rolling offers that are not.

The search feature lays the groundwork for a larger attack that publicly traded Groupon is making on mobile to stay competitive in location-based mobile services against the likes of Google, Yelp and Foursquare — with the latter just raising $41 million to position itself as a platform for local search, offering local deals as an added twist. It’s an area that Facebook too is targeting, as evidenced by its mobile app update today. With the search feature available now in the U.S., Groupon plans to turn the feature on across the rest of its mobile footprint this year, Katz says.

On top of the new search updates, the Android app is now able to support tablets, the first time that it has been optimized for screens of up to 10 inches.

And while the iPad app is not getting an update today, Groupon says that this week it is extending the number of countries where it will work. Belgium, Japan, Malaysia, South Africa and Switzerland are getting added, taking the total to 18 countries.

That’s still a far cry from the 42 that Groupon supports with its iPhone app, but Katz says that they hope to reach parity “by the end of the year, if not sooner.” iOS usage, he says, “still dominates” on Groupon’s platform but the company’s move to roll out features like search internationally, into countries where Android is stronger than iOS, may see that balance changing, which is why it’s important for Groupon to not only keep updating that Android app but add tablet support, as well.

Groupon’s bid to “transition from being just daily deals into a more complete offering,” in Katz’s words, is so far showing signs that it is paying off, with both mobile and non-time-specific Marketplace deals playing roles in that.

About half of the company’s local transaction volume in North America is coming from its Deals Marketplace at the moment, and that deal bank (Groupon’s internal term for the Marketplace) has grown by 300 percent compared to last year, with 37,000 active deals last quarter.

Meanwhile, the company reported last quarter that 40 percent of transactions are being completed on mobile devices, with mobile users typically spending 50 percent more than web customers. While Groupon doesn’t break out what that means in terms of actual revenues, as a rough calculation North America saw overall revenues of $375 million last quarter, which would work out to $150 million of revenues on mobile for the period. (Of course, that revenue also came with an operating loss of $12.9 million and a loss per share of 12 cents, signs that the company needs to drastically continue to expand its business and margins to sustain itself longer term.) The product enhancements appear to have come in conjunction with a rise in stock.

Putting search on the mobile apps brings these two strands together: “Search has been the most-requested feature,” says Katz. “And we now have the inventory on the back end to bring it to mobile.” Although in face Groupon said that it released the feature earlier this month on iPhone, it’s been testing it out quietly to ensure it worked without bugs before publicising it. Search is available from anywhere within the app, which also makes it more likely people will use it.

While there are a number of third-party companies able to power local search features — Foursquare’s API is used by some 40,000+ developers — Katz says that Groupon built its own search engine as part of its investment in “data science and algorithmic ranking,” and its own bid to become a search company. “We are becoming a different company technologically,” he says.

Katz wouldn’t comment on whether Groupon would use the search feature as a window to other data, such as local listings and user reviews — two areas already hotly contested by its rivals — but he did hint that there may be more news in this area soon.

“We have such a large mobile audience that we have an opportunity to do more,” he says.

This hasn’t been a great year for Foursquare. “Check-ins are no longer what they used to be,” as Ingrid Lunden observed last month. There seems to be a general consensus that “Foursquare keeps resembling Yelp more and more…” but that comparison isn’t necessarily flattering, especially since there’s little doubt that Yelp has much greater public mindshare.

Then former Square COO and current Khosla Ventures partner Keith Rabois attacked them publicly (click through for the article’s amusing corrections, if nothing else!) prompting some bizarre musing from Michael Lazerow on when it’s OK for someone like Rabois to bash a founder.

(My answer, for what it’s worth: whenever he freaking feels like it. He’s not the Pope. He’s not the President. He’s just a venture capitalist. If you’re worried about public criticism hurting a company, then it’s built on apparent rather than real value and it deserves all the criticism it can get.)

Crowley responded, gamely:

@sriramk @rabois @hunterwalk Keep hating… and while you're doing so Foursquare will keep becoming the location layer for the Internet.—
Dennis Crowley (@dens) March 16, 2013

Great tone…but I don’t know about that content. So the mighty check-in was just what filters were for Instagram, a gateway drug, to soon be replaced by “the location layer for the Internet?” Uh-huh. You know what that sounds like to me, in the long run? A map. Like Harry Potter’s “Marauder’s Map,” to use Crowley’s own words.

This does not sound like wise strategy. To paraphrase Paul Graham’s on-stage Office Hours at the last-but-one TC Disrupt, “Competing with Google. That’s not so bad. But you’re competing with Google at something they’re actually good at.” And, oh yes, also competing with Apple, whose maps have been steadily improving since their first stumbling introduction. Meanwhile, Google casually rolls out insanely great maps features like ski trails or underwater Street Views several times a year.

Does anyone seriously think, in the long run, that Foursquare has a better chance of “becoming the location layer for the Internet” than both Google and Apple, both of whom clearly take mapping extremely seriously? Anyone? Anyone? Bueller?

Yes, their API is exceptionally useful. I should know: I’m at least three of those 40,000 developers. But a great API does not a successful company make, and there are plenty of competitors; Yelp, Google Places, Factual, etc, although Foursquare is admittedly the most developer-friendly.

So I hate to say it, but Keith Rabois was one thousand percent correct. With their tactics struggling in the face of better-established competitors like Yelp, and their strategy apparently consisting of plotting a course between Google and Apple’s Scylla and Charybdis in a leaky drifting raft…what’s poor flailing Foursquare to do?

Funny you should ask. I happen to have an answer. And it is this: merge with Groupon.

Wait, no, hear me out. I know what you’re thinking: bad idea, or worst idea ever? and/or listen, buddy, two dumbs don’t make a smart. Groupon of course just fired its CEO in the face of sagging, well, everything.

But think about it. What’s one thing Groupon has that almost nobody else does? An existing relationships with an enormous number of small businesses. Frequently awfully contentious relationships, granted, but relationships nonetheless. What’s one thing that really defines Foursquare? Not the “location layer,” but the check-in. What’s a business model that just might work? Have users check in with intent — “shopping for my mother” or “hungry for lunch” — and promptly get deluged by coupons from a panoply of nearby retailers, and then collect a percentage of those sales.

Which is of course something Foursquare kind of tries to do already. (As of eighteen months after I suggested it.) But for it to really work they need a huge critical mass of small businesses to participate. What’s one thing Groupon kind of managed to do with its bizarre, multi-billion-dollar rise and fall? Connect to just such a critical mass.

Call me crazy. Call me a fool. But I think if these two long-term losers got together, they just might turn into a winner. It’s a longshot, sure — but it doesn’t seem much longer to me than believing that either has much of a glorious future on their own.

As the last of the dust settles on the departure of Groupon’s founder/CEO Andrew Mason, the daily deals and local commerce service today filed an 8-K form with the SEC to detail how it would be compensating his interim co-CEO replacements Eric Lefkofsky and Ted Leonsis; and also giving a sweetener bonus to one of its key staff, Jeffrey Holden, in 2014 and 2015.

Leonsis will be on $210,000, and Lefkofsky $200,000 — both on an annual basis, meaning that only a portion of that will be paid, should a permanent CEO be found sooner. Groupon notes in the 8-K that these salaries match the amount that each would have been paid had they remained directors of Groupon, as they had been before the co-CEO appointment. (That appointment invalidates them from receiving the Director Compensation Plan.)

Holden’s salary, meanwhile, is not noted in the 8-K, but the form does specify that he will be paid a guaranteed bonus in 2014 and 2015, $500,000 for each year.

There are a couple of interesting things to read into these figures:

The compensation for Holden, SVP of product management, is presumably being made to make sure that he stays on board to see the company through its continued transformation — Groupon had been trying to diversify under Mason to do more in local commerce services, specifically using mobile technologies; to complement the business it has already built up in daily deals — which has come under some pressure in recent times.

Holden, one could argue, holds the key to a lot of where Groupon would like to go as a company. He had once been an Amazon executive overseeing consumer websites, and had joined Groupon in 2011, along with the April 2011 acquisition of his company Pelago, makers of a Foursquare-like app called Whrrl. That deal will be coming up to its two-year anniversary next month. Holden will not get either year’s bonus if he leaves the company before December 31, 2015.

Meanwhile, the compensation for the two co-CEOs is at the same moment very generous and relatively tiny. On the one hand, if you compare it to what Mason had been making, it’s big money: Mason’s last annual salary was the princely sum of $756.72, giving him a severance of $378.36. Compared to that $410,000 is out of the ballpark.

Then again, if you recall that Lefkofsky reportedly made some $382 million cashing out on Groupon shares pre-IPO, suddenly those hundreds of thousands seem as ephemeral as a daily deal.

Groupon last month posted quarterly revenue of $638.8 million, slightly beating analysts’ expectations, but an operating loss of $12.9 million and a loss per per share of 12 cents, both failing to meet estimates — precipitating Mason’s departure after several past quarters of poor performance.

A lot of people are talking about management issues at Groupon, but maybe daily deals just aren’t that big of a deal. The Verge yesterday posted a lengthy look at what went wrong at Groupon, the e-commerce business that recently outsted its CEO and founder Andrew Mason after reporting another disappointing quarter. Basing the story on interviews with a “dozen current and former employees, executives, investors, and board members,” the Verge’s conclusion seems to be that one of the biggest problems for the company was its management — or mismanagement, as the case may be. “Greed is Groupon,” the article’s title proclaims.

Yes, there are enough proof points in the story, along with feedback from others close to the company, to paint a picture of intentions gone horribly wrong — and yes, we hear similar descriptions especially on the international front. Yet I think the Verge also missed a bigger point, and did not ask the bigger question: did (does) Groupon actually have the right products to be a winning company?

Groupon’s main business, pre-IPO and today, is daily deals — offering a way for merchants and businesses to better manage their yield by creating discounted offers for things to fill in gaps in service-led businesses, a concept later extended to goods as well. This was, undeniably, a very active business in the years leading up to Groupon’s IPO. It got a lot of investors very interested in the company, and banks created big projections for how that business would grow.

But at the same time, something else started to happen. Consumers and some businesses actually cooled off from the idea. Some of that had to do with poor product experience, but there was also a general sense that this was more a fad than a permanent fixture of the e-commerce game. It even picked up a term: “daily deal fatigue.”

It didn’t help that Groupon’s wild rise spawned hundreds of clones, along with some bigger competitors like LivingSocial, to further flood the market. And therein lies the problem: as much as Groupon may not have handled its own growth well — and perhaps continues to mishandle it in some regards (eg if you think having a single IT platform for all subsidiaries can make or break a business) — the fact that its competitors also have faced a lot of problems speaks a lot more about the state of Groupon today than Groupon’s management foibles do.

Of course, Groupon is still the leader in its market. Daily deals in the last quarter grew by 300% over last year and will be the engine that will take Groupon, as Verge points out, to a projected $6 billion in revenues this year (profit is another story). But as for how the business will grow going forward, management issues and leadership changes may be moot points. The problem is that the products and strategy post-Mason are the same as before.

Yes, Groupon has moved beyond the daily deal – following through on Andrew Mason’s concept, outlined in May 2012, to become “the operating system for local commerce.” That has included moves into mobile payments, point-of-sale solutions, hyperlocal offers on your mobile device, and more direct sales of products to compete against Amazon and other straight e-commerce players.

But as daily deals continue to trundle along, many of these newer services are offered outside of the U.S. (and international makes up more than half of Groupon’s revenues today). And if Groupon does manage to crack markets like mobile commerce, beating out the many incumbents plus companies like Square and PayPal, it will be some time before these services begin to yield big rewards.

And all the greed or generosity in the world won’t change that.

Andrew Mason, CEO and founder of Groupon, has just been replaced by Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonisis, who will take over the new position of Office of the Chief Executive.

They will serve as interim co-CEOs while they hunt for a replacement to take over permanently.

Here’s the official Lefkofsky quote from the release:

On behalf of the entire Groupon Board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history. Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future.

This decision comes fresh on the heels of a rough morning, in which Groupon lost a quarter of its market value after an incredibly underwhelming Q4 earnings report.

But Groupon’s troubles have extended much further back than that, and most of the pressure has fallen on Mason. There was a push in the past few months to replace Mason at the helm, and stock dropped by double digits when Groupon’s board kept Mason around.

However, a Hedge Fund investment saw Groupon’s stock rise 11 percent in November, only to drop again after this morning’s report.

Mason just tweeted the following, which seems to have broken Jottit:

For Groupon Employees: jottit.com/v5wux/ (Apparently, sharing oranges is necessary but insufficient #leadership)

— Andrew Mason (@andrewmason) February 28, 2013

Here’s the entirety of his memo:

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

Mason has been the founder and CEO of Groupon since its inception in 2008, led it through a $750 million IPO, and struggled to maintain momentum as the daily deals business began to flounder.

Update: The WSJ has secured the internal memo sent out to Groupon employees to alert them of Andrew Mason’s departure as CEO.

Dear Groupon,

After more than five years of super-human service to Groupon, Andrew has been asked to step down.

Andrew’s achievements during his tenure are virtually unmatched in Internet history. Not only did he help invent the daily deals space, but he also created one of the fastest growing companies in history. But for all of us on the Board, maybe his greatest achievement is that in the face of extreme pressure and public scrutiny, he guided the company with grace and never lost sight of the things that matter most: our customers and merchants.

It’s hard to believe that Groupon is only four years old. Our journey began in November of 2008 when we offered our first deal (pizza at 50% off) to a handful of people in Chicago. Today, with over 11,000 employees, we now offer more than 30,000 deals a day to over 200 million subscribers globally. But even more staggering is the fact that our customers purchased more than 50 million Groupons last quarter alone.

Groupon is a very different company today than it was just a few short years ago. From our local daily deal roots, we have spent significant time and resources evolving into new categories including Goods, Getaways, and Live. We have also fundamentally changed the way customers interact with Groupon. We have migrated nearly 40% of users in North America to mobile, while dramatically reducing our reliance on email which now accounts for less than 50% of our transactions. And with Pull, consumers can browse among thousands of deals on our site and buy exactly what they want, when they want it.

In the midst of this evolution in 2012 we delivered 35% growth in billings to $5.4 billion, 45% growth in Revenue to $2.3 billion, 22% growth in active customers to 41 million. Additionally our Operating Profit improved from a loss of $233 million in 2011 to a gain of $99 million last year.

Yet we all know our operational and financial performance has eroded the confidence of many of our supporters, both inside and outside of the company. Now our task at hand is to win back their support.

We also need to stay relentlessly focused on doing what is right for our customers and merchants. We’ve built a curated marketplace that is vibrant and thriving; and if we continue to invest in our future, stay focused on the long term and lead through innovation, we can achieve truly great things together.

As Groupon starts to write its next chapter, Ted and I are both honored to be able to help guide the company until a new CEO is in place. We are fortunate to have a very talented and committed management team to help us execute on our vision.

We appreciate the tireless effort you have poured into getting our company where it is today, and we are even more excited about the future that lies ahead.

Eric Lefkofsky
Executive Chairman & co-founder

Ted Leonsis
Vice Chairman

Groupon has just put out its Q4 and full-year results. It has reported quarterly revenue of $638.8 million with an operating loss of $12.9 million and a loss per per share of 12 cents, falling short of analyst expectations on the EPS front — they had predicted $638.41 million in revenue and EPS of $0.03.

Those numbers show 30 percent revenue growth and a slightly smaller ($12.9 million versus $15 million) operating loss compared to the same period last year. (Those Q4 results needed to be restated about a month after reporting because Groupon had higher-than-expected refunds, due to selling more expensive products and having customers make more returns of those goods.)

As of 4:31pm Eastern, Groupon shares had fallen 22.44 percent (to $4.64) in after-hours trading.

The earnings release emphasizes gross billings, which grew 24 percent year-over-year to $1.52 billion.

“Record billings growth this quarter is a clear signal that customers love Groupons,” CEO Andrew Mason said in the release. “We will continue to invest in growth through 2013 as we see new opportunities to give our customers what they want.”

For the year as a whole, Groupon is reporting revenue of $2.33 billion (up 35 percent) and operating income of $98.7 million (compared to a loss of $233.4 million in 2011).

There were some bright spots for the company this past quarter due to holiday season shopping, particularly in the area of mobile commerce, one of the services that it wants to expand as part of its plan to expand beyond daily deals to provide more services to local businesses. It noted that Black Friday mobile transactions were up 140 percent year on year, with four times as many mobile purchases as on a normal Friday morning; mobile drove over 40 percent of Groupon’s overall transactions during that period as well as over half of Groupon Goods’ transactions. The earnings release says that nearly 40 percent of transactions were completed on mobile in January, up 44 percent from the previous year.

Focusing on international, Groupon reported gross billings of $802 million (up 6.2 percent) and revenue of $263 million (down 15.9 percent). Groupon’s international business, which covers 47 countries outside of the U.S., with the U.K. being the biggest market, is still based around the company’s legacy business of daily deals. This is largely because Groupon’s growth has been inorganic and acquisition-based, and so each country has its own back-end system, which makes it a challenge to integrate into what the U.S. is doing. It’s about a year behind but apparently integration of some of the mobile commerce services is on the agenda, so we may see services like Breadcrumb point of sale solution coming to international waters soon.

The results are coming in ahead of a Groupon board meeting tomorrow.

[Note: This is a weekly series. If your company is doing something amazing to help a charitable cause or doing some good in your community, please reach out.]

When you think of Groupon, you immediately think of instant deals for restaurants and nail salons. That’s not all the company is about though, it’s about connecting people to businesses and helping you find interesting things to do in your area. Sure, it’s a business like any other company, but as we’ve come to learn, a lot of companies these days do non-profit work, mostly in the background. You know, when they’re not acquiring companies.

We’ve been able to surface some of these stories, and I had a chance to speak with Groupon’s Head of Social Innovation, Patty Huber Morrissey, about what the Chicago-based company is working on.

The program is called “Grassroots“, and here’s a quick video explaining it:

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What does Groupon do for the world around it?

Most people think of Groupon as a website, an email, or a mobile app to find great deals. And while some think that our business model is easily replicable, it’s incredibly hard to build the thousands of relationships and historic expertise required to succeed in this business.

Simply put, we connect organizations (merchants and charities) with consumers to build and support local economies around the world in 48 countries everyday.

We’ve seen your larger campaigns, what do you do on a daily basis?

Our national campaigns tend to garner more widespread exposure versus our smaller, hyperlocal campaigns – we’ve worked with DonorsChoose.org, Feeding America and World Wildlife Fund, to name a familiar few. What many people don’t realize is that we feature 10-15 local campaigns around the U.S. every single week. Groupon Grassroots, our philanthropic program, is a team that facilitates local, project-specific campaigns in communities around the country. The campaigns look very similar to regular Groupon deals, and are sent to local subscribers in the daily email of each relevant market. The difference with Grassroots campaigns is that the project is designed to have a tangible, local societal impact, the organization receives 100% of the donations raised (versus regular Groupon deals), and Groupon even absorbs the credit card fees.

While the exposure and raised funds are great, the real value of these campaigns is the skills and capacity-building we’re providing for these organizations. Our campaign organizers intentionally work with the “little leaguers” who are new to online engagement. While we could work with more established charities, they don’t necessarily need us as much; we can make a more significant impact by working with local changemakers, dedicated to their communities.

What do your employees do to get involved to make the world a better place?

The bulk of Groupon employees are young, passionate and dedicated to making a meaningful impact; we love that, and we’re building more opportunities to propel that enthusiasm with our Employee Volunteer Program. We’ve offered a variety of opportunities so far, such as playing soccer with local youth, assembling bikes from recycled parts and gardening at a local urban Chicago farm (among many others). Grown from The Point, the first group action, fundraising platform, we put a lot of muscle into being a company that provides a sense of purpose. We’re dedicated to leveraging our employees’ robust skill sets and connecting volunteer experiences with talent development and teambuilding objectives. The more mileage we can get out of our programs, the more resources we can put behind them.

What’s the #1 thing that Groupon is proudest about, for good, that’s never gotten “attention”

I’m most proud our commitment to the little guy. We provide a platform, tools and reach that a small business or organization couldn’t find elsewhere. On large scale, what we’re doing here is really powerful. Because of the hyperlocal nature of Groupon, many consumers don’t realize that Groupon is global. While that’s great because it feels personal, people don’t realize the power/influence we have to affect change globally. I just read a recent study by Civic Economics about the economic impact that locally-owned businesses have on their economies … We have the ability to shift consumer buying behavior on a global scale. Imagine how that would impact communities – helping consumers have a greater impact with each dollar they spend at a locally-owned business. We’re excited about that and many people don’t think about us in that way. My vision is for people to think of Groupon as a force for good, and as a champion for local business.

Are there plans to expand your programs? If so, how?

Definitely. We recently named the internal team ‘Social Innovation’ to reflect our evolution beyond one program (Groupon Grassroots). We’re proud of what we’ve built with Grassroots and how it honors our roots with The Point, but our goal is to execute much more than just local campaigns. We’ve already launched our Employee Volunteer Program and will be expanding these programs to our European offices in the near term.

What’s next – a social innovation lab. It will resemble an incubator for social intrapreneurs. Similar to Hub Ventures and Impact Engine, two accelerators for for-profit social entrepreneurs, we’re going to develop profitable solutions that promote societal and environmental change. There are so many enthusiastic, talented people at Groupon that we don’t want to limit the ideas to the seven of us on the Social Innovation Team. We want to source ideas from employees on the ground doing the work, talking to consumers and merchants everyday.

Name one charity that really gets you excited, one that’s testing new models

One … That’s hard. We bucket all mission-driven organizations together – regardless if they’re for-profit, non-profit, or just an individual with some gumption; we care about impact. I attended Impact Engine’s Community Demo Day earlier this week, and the presentations I heard there from the eight for-profit impact entrepreneurs were impressive. A standout from the event was Collaborative Group. Entrepreneur Kathleen Wright developed a model that connects big brands, like J.Crew and Reef, to a network of pre-vetted artisans to solve the challenge of sourcing sustainable products profitably. In an age where philanthropy and government programs are not meeting the demands of society, and where businesses need more sustainable practices, the social entrepreneur is innovating with blended for-profit and for-purpose models to meet the demand on both sides.

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It’s nice to see this component becoming a true part of the culture of many companies, as we’ve learned from Facebook, Google, Twitter and lately, Square:

Starting to pick up trash around the neighborhood. Join us! 5th and Natoma. #cleanstreets http://t.co/C5BBBVFv

—
Jack Dorsey (@jack) January 11, 2013

I’m sure that employees that get to participate in the programs feel better about the work that they’re doing too, as it’s usual for people to spend more time at work than they do with their families. Finding time to raise money for charities or volunteer at a local soup kitchen falls off of the to-do list as quickly as the hours roll off of the daily clock.

Want to see all of Groupon’s active campaigns and results? Check them out here.

In case you’ve missed our previous Weekly Good pieces, have a look here, here, here, here, here, here and here.

Y Combinator company Glassmap, a location-aware app that was big back in the day (last year), has just announced that is has been acquired by Groupon. A representative from Groupon has confirmed to TechCrunch that the company has indeed acquired Glassmap and is ”excited to bring the team aboard.”

This makes total sense, because Groupon needs to know where you are, who you’re with, and what you’re doing and like to do so that it can push more relevant deals to you. This is something that companies such as Google are also working on.

Here’s what the company had to say:

Today, we’re happy to announce that Glassmap has been acquired by Groupon! Our goal when we started building Glassmap was to help people find what was interesting and relevant around them. But in plainer terms, we just really wanted to mold all these fancy ideas and innovations of Silicon Valley into a simple and useful tool for the real world. Groupon has revolutionized how people today use technology to interact with the real world, and that’s why we’re so excited to join them. Together, we’ll be able to create even more amazing products.

Most importantly, we want to thank all our loyal users for riding with us for these past two years. It’s been really fun for us, and we hope to continue delighting you with our efforts with Groupon. The Glassmap application will wind down and close on February 15, 2013.

As the team mentions, it now has an opportunity to take what it has built and put it in front of a more mainstream audience – like outside of San Francisco.

When the service launched, I spoke with its team, and they told me about some pretty interesting location technology it was building, which doesn’t tax your phone’s battery like other apps. The team, Geoffrey Woo, Jon Zhang and Jonathan Chang, are all engineers who dropped out of Stanford’s MS program. Their focus in school? Distributed systems, circuits, web and mobile development, and industrial design.

Quite a grab for Groupon.

No word on what the purchase price was, but this sounds like one of those fancy acquisition/hires that we talk about all of the time, mostly surrounding Facebook and Google. Is Groupon about to get more hip? We’ll find out.

[Photo credit: Flickr]

Groupon CEO Andrew Mason last year set his company a goal of adding more value and diversity to its bread and butter business in daily deals, and today it took one more step in that direction: Groupon Payments — its dongle-based Square/PayPal Here competitor — has now been added to its Merchants app for Android handsets.

Groupon Payments first launched in September but was available only for iOS devices; this new version, which was first soft-launched at the end of December, will give Groupon a much better crack at critical mass for the payments service. For now the launch is U.S.-only, where Android devices now account for over 50% of all smartphones in use.

As with the iOS app (and in keeping with what competitors are doing) the primary purpose of Groupon Payments is to give merchants, especially smaller merchants, a cost-effective way to take card payments. But by rolling it into Groupon Merchants, the company is hoping for more sticky usage and traction by rolling it in with other features. This is not unlike what companies like Square are doing, with the concept of a merchant dashboard now almost table stakes in the mobile commerce game.

The Groupon version of that concept includes the ability to redeem Groupon deals, scan barcodes, view transaction history, add tips and taxes, make refunds, email receipts, and look at other purchasing and daily deals analytics to track things such as how well a particular deal performed. It also says it provides support seven days a week to those with any issues and guarantees security on transactions.

What it has yet to do is extend Android to support Breadcrumb, the point of sale app that Groupon bought and offers on iPad devices to manage different aspects of running restaurants and cafes — including menus, ordering and labor management, and Groupon Payments.

The fees that Groupon charges Groupon Merchants for Payments are 1.8% on Visa, MasterCard and Discover when swiped, 2.3% when keyed in, plus $0.15 for each transaction. American Express pricing is more complicated as it is “determined by American Express based on your industry category.” The rates range from 2.3%-3.5% (swiped) and $0.00 to $0.15 per transaction, says Groupon. For non-Groupon Merchants, the fees are higher: 2.2% when MasterCard, Visa and Discover are swiped, plus $0.15 per transaction.

Like a lot of companies, Groupon has focused the majority of its first-try efforts on iOS users, extending them to Android in a second wave of growth. Groupon told me in December, when it was releasing a major update for its iPad app, that this is partly because Groupon develops first on the platforms that are used most by its audience. (Which is also why we’ve seen little, so far, from Groupon for Windows Phone and Windows 8.)

Tablets is one game where Apple is still the dominant player, but when it comes to smartphones, Android is the biggest platform in the world. Gartner’s most recent figures for worldwide smartphone shipments, from Q3, noted that Android accounted for 72% of all shipments worldwide. In the U.S. specifically, the figures are not as high but still strong: ComScore’s most recent numbers, out in January, noted that Android was on 53.7% of all smartphones in use in the U.S., versus 35% for the iPhone.

Groupon has so far not released any figures on how Groupon Payments has fared on the iPhone, saying only that it has seen “great reception” of it. But it may be that the smaller, price-sensitive, independent local merchants that Groupon targets may be more likely to use Android handsets, which come at a range of prices and are often significantly less expensive than iPhones.

There are at least some that have been waiting for Groupon to add Android to its list of supported platforms. ”Heaven forbid if you have an Android phone though,” one person wrote sarcastically on Groupon’s blog post announcing the launch of Groupon Payments on iOS in September. “Nevermind that there are far more of them than iPhones….”

Groupon’s share price has been growing in the last couple of months with promises of improved revenues going forward, so it needs all the new services it can add to reach that goal. In the company’s last quarterly results, it reported results below expectations with earnings per share of $0.00. Other strategies at the company have included adding restaurant reservations with its purchase of Savored, and a B2B service powering daily deals for other brands like Major League Baseball. Yesterday, it said that it would be releasing Q4 and full-year results on February 27.

Groupon wants to be the king of local commerce, but with Groupon Goods it has a platform for online sales that compete with the likes of Amazon to sell goods from everyone everywhere. Today, it put another link into the second of these strategies with the acquisition of CommerceInterface, a channel management technology used in e-commerce operations that aggregate goods from multiple vendors.

Terms of the deal were not disclosed. And it doesn’t look like CommerceInterface, headquartered in Salt Lake City and operational since 2007, had raised any significant funds from outside investors previously.

Groupon had already been using CommerceInterface in its own Groupon Goods operations since April of this year, it said in a release. Groupon Goods is a bit of a soup-to-nuts effort: it’s a platform for different merchants to post sales of diamond jewellery and designer sunglasses, but also mattresses, computers and cutlery. So this could be a matter of the company wanting to better integrate the service as it continues to build up that business, which as of Q3 was on a run rate of $1.5 billion in global billings. Using an outsourced service could be less efficient in that case.

“CommerceInterface has proven to be an important piece of Groupon Goods infrastructure in the U.S., quickly and reliably streamlining the execution of orders and other vendor interactions,” said Faisal Masud, head of Groupon Goods, in a statement. “We look forward to enhancing our abilities to better support merchants overseas beginning early next year.”

When I first heard about this deal, I thought it could be a good way for Groupon to add yet another service to its portfolio that it can offer on to other businesses to improve their overall e-commerce operations.

CommerceInterface currently offers a platform to merchants to help them optimise how and where they list their items to sell across different marketplaces — be they eBay, Amazon, Fab, Groupon Goods, or somewhere else. You could see something like CommerceInterface sitting as part of a wider service portfolio that Groupon offers to merchants as a “one-stop shop” for all their e-e-commerce needs. Groupon has made a number of other acquisitions that you could put into the category of B2B IT services, including its Breadcrumb point-of-sale buy earlier this year. That app got an update just earlier today.

But according to the release, this doesn’t look like it will be the case: “CommerceInterface will no longer service other retail channels and current customers will have the option to transition to other vendors over the next six months with migration support from the company,” the company says. That’s a missed opportunity, I think.

Full release below.

Groupon Acquires Channel Management Provider CommerceInterface

CHICAGO–(BUSINESS WIRE)– Groupon (http://www.groupon.com) (NASDAQ: GRPN) announced today it has acquired CommerceInterface (http://www.commerceinterface.com), a leading provider of web-based channel management technology that helps manufacturers, distributors and retailers succeed at managing their businesses and selling online. Terms of the deal were not disclosed.

Groupon has used CommerceInterface technology since April 2012 to streamline operations of the growing Groupon Goods platform and automate interactions with thousands of existing vendors. The acquisition enables Groupon to leverage infrastructure provided by CommerceInterface to support and optimize the Groupon Goods business around the world in 2013.

“CommerceInterface has proven to be an important piece of Groupon Goods infrastructure in the U.S., quickly and reliably streamlining the execution of orders and other vendor interactions,” said Faisal Masud, head of Groupon Goods. “We look forward to enhancing our abilities to better support merchants overseas beginning early next year.”

CommerceInterface will no longer service other retail channels and current customers will have the option to transition to other vendors over the next six months with migration support from the company.

In Q3 2012, Groupon Goods reached an annual run rate of nearly $1.5 billion in global billings. A wide variety of high quality inventory is featured, from diamond jewelry and designer sunglasses to mattresses, computer tablets, 3D HD televisions and the giant radio-controlled flying shark. New items are added every day of the week and often sell out. To find the perfect holiday gift or subscribe for email updates, visit http://www.groupon.com/goods.

Groupon got put through the meat-grinder last week as founder and CEO Andrew Mason defended himself and managed to hold onto his role after another terrible earnings quarter. Now Groupon is getting down to the business of streamlining: Mike DeLuca, the VP of sales for Groupon’s restaurant reservation system Savored (just bought in September), is now also VP of sales for Breadcrumb, the company’s iPad-based point of sale system, the company announced today.

He will report to Rob Kilgarriff, Groupon’s North American head, who himself was only appointed in September.

The move, of course, makes perfect sense for Groupon. If the company is already sending people out to drum up business for one service that caters to restaurants, then it should be talking about and selling related services, too.

By offering a more complete portfolio, this falls into the wider remit that Andrew Mason put forward earlier in the year for Groupon to go beyond the daily deal and offer a one-stop shop for local e-commerce.

There is another message here, too, however.

Last week, my colleague Colleen Taylor brought attention to some of the talent drain at Groupon, noting specifically how the whip-smart founders of recently-acquired Adku all left within months. DeLuca joined Groupon with its Savored acquisition — he had played a key role at the company as its chief revenue officer — and so by giving him a bigger role at Savored’s new owner, Groupon is trying to demonstrate that it does recognise leaders and is holding on to them and helping them grow.

DeLuca himself could become a key person for Groupon as it continues to build up its local commerce operations. This is where most of his experience has been for years. Before Savored, he served as SVP at AOL Local, and before that as an SVP at Yahoo.

This doesn’t mean that Groupon is pulling away from daily deals, however. The company, just last week, made a move to expand how it offers its daily deals platform on a wholesale basis for third parties, inking an agreement with Major League Baseball to power its daily deals service.

Full release below.

Groupon Appoints Mike DeLuca as VP of Sales for Breadcrumb

Groupon (www.groupon.com) (NASDAQ: GRPN) announced today that effective immediately Mike DeLuca has assumed the role of VP of Sales for Breadcrumb, the company’s iPad-based point-of-sale system for restaurants, bars and cafes. In addition, DeLuca will remain in his current role as VP of Sales and Operations for Savored, a Groupon-owned restaurant reservation and yield management platform for high-end establishments. He will continue to report to Rob Kilgarriff, VP and GM of North American Sales and Account Management, Groupon.

DeLuca is a 20-year sales veteran with experience at a number of technology companies that cater to local businesses. In the early days of Savored, he played a key role as Chief Revenue Officer, and prior to that he served as SVP of Sales and Operations at AOL Local, where he managed all revenue and operations for a sales team of more than 300 inside and field representatives. DeLuca has also held SVP and VP sales and operations roles at Yahoo and Yodle, a New York-based startup specializing in marketing management tools.

“Mike is a seasoned sales leader with an innate understanding of the needs and operational challenges hospitality businesses face,” said Kilgarriff. “He has greatly accelerated our efforts to introduce both Breadcrumb and Savored to restaurants.”

DeLuca has a B.S. in Communications and Human Development from Boston College.

About Breadcrumb

Founded in New York City in January 2011 by a team of restaurant industry veterans, Breadcrumb is an easy-to-use, powerful and affordable iPad point-of-sale (POS) solution for food and beverage businesses. Breadcrumb removes the complexities, costs and headaches of antiquated POS systems. Plans start as low as $99 per month and include free installation and 24/7 phone and email support. Businesses interested in learning more about Breadcrumb can visit www.breadcrumbpos.com. The Breadcrumb App can be downloaded for free from the iTunes App Store.

About Savored

Savored is a leading provider of restaurant reservations and high-end restaurants discounts. More than 1,000 businesses nationwide have used Savored’s platform for restaurant yield management to offer diners the lowest possible prices at some of the best restaurants. After booking a reservation on Savored.com and visiting the restaurant, diners enjoy up to a 40 percent discount applied automatically to their bill. Merchants enjoy incremental revenue for tables that would otherwise be empty, and consumers are incentivized by the ‘built-in’ discount and roster of high-end eateries to explore. Merchants can learn more about Savored’s free 30-day trial at http://savored.com/free-trial/ or by calling (877) 801-1209. Consumers can sign up to receive Savored emails at http://savored.com/signup/.

About Groupon

Groupon (NASDAQ: GRPN) is a global leader in local commerce, making it easy for people around the world to search and discover great businesses at unbeatable prices. Groupon is reinventing the traditional small business world by providing merchants with a suite of products and services, including customizable deal campaigns, credit card payments processing capabilities and point-of-sale solutions to help them attract more customers and run their operations more effectively. By leveraging the company’s global relationships and scale, Groupon offers consumers incredible deals on the best stuff to eat, see, do, and buy in 48 countries. With Groupon, shoppers discover the best a city has to offer with Groupon Local, enjoy vacations with Groupon Getaways, and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods. To subscribe to Groupon emails, visit www.Groupon.com. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.GrouponWorks.com.

Groupon shares (NASDAQ:GRPN) closed at 4.42, 11.62 percent above yesterday’s level. CEO Andrew Mason’s interview was highly anticipated today. Yesterday, AllThingsD reported that the board questioned Mason’s vision.

Mason didn’t try to deny or pretend that nothing happened. Instead, he was very candid, going so far as to say that he would fire himself if he thought he wasn’t the right man for the job. He didn’t try to hide that investors currently have doubts.

Groupon has had a tumultuous year, with shares falling from a 25.84 high point on February 8. At 4.42, it represents an incredible 82.9 percent downturn. Mason even said that with such a decrease, board members have to question his legitimacy. Otherwise they wouldn’t be doing their jobs properly.

After defending his position, Mason outlined why he believed in Groupon. It was all about the company’s future, with goods deals and international markets as the two key elements of Groupon’s success.

Yet, an 11.62 percent increase represents a small market capitalization gain when shares are trading at such a low level. Groupon’s market cap is $2.9 billion tonight. Mason said that shares won’t trade above 20 any time soon.

During Business Insider’s Ignition conference, Groupon CEO Andrew Mason commented yesterday’s stories about his role at the company. AllThingsD reported that the board was discussing whether the company needed a new CEO. Mason replied by stating that “it would be weird if the Board wasn’t discussing whether I’m the right guy for the job.” Groupon has gained traction in an entirely new space and a lot of questions remain.

“There is so much exciting stuff happening at the company”, Mason said. He emphasized the big opportunities in front of the company. “We will look back at those stories and will be proud that we got over them,” he continued.

According to Mason, with 40 million active customers, Groupon is trying to do what Amazon has done for products, but with local businesses. On the other hand, goods deals are a way to take what the company has learned from local deals and apply it to goods.

This year, Groupon’s stock has been drastically down. It was trading at over $24 and is now trading at exactly $4.00 a share. Mason said that Groupon is optimizing the stock for three or four years.

Most of the interview was about how the press reports on Groupon’s activities. He said that many articles “countered each other” and don’t depict the reality. International growth and goods deals have surprised the company.

Finally, Mason reiterated that he is the right guy for the job. “If I thought I wasn’t the guy, I would be the first person to stand up,” he said. “I think we have the strategy, I think we have the team and the board sees that,” he continued.

Today, Groupon has officially found its new chief operating officer. The daily deals leader announced this afternoon that it has promoted Senior VP of Global Sales and Operations, Kal Raman, to COO, where he will continue to oversee the company’s global sales and operations and report to CEO Andrew Mason.

Raman fills a position that has remained vacant since September of last year, following the company’s awkward, short-lived dance with Margo Georgiadis, who spent five months as COO before returning to Google (from whence she came). Since then, Mason has unofficially overseen sales and operations, before handing the reins to Raman.

The new COO has seen a quick ascension since joining Groupon. He joined the company in April as the Senior VP of the Americas and was quickly promoted to Senior VP of Global Sales, a role he assumed in August. Seven months, two big promotions.

Prior to joining Groupon, Raman was the Vice President of Global Fulfillment at eBay. Before that, the exec served as the CEO of GlobalScholar and Drugstore.com, was a VP at Amazon and held a number of management roles at Walmart.

“In a very short time, Kal has had a significant impact on increasing the number and quality of local businesses using the Groupon platform to the benefit of Groupon customers around the world,
Groupon CEO Andrew Mason said in a statement. “We are already seeing progress in Europe and Kal will be instrumental in leading our company as we deploy tools and technologies that will help us continue to grow both Groupon and the categories in which we operate.”

Raman has a lot of work in front of him. Not only will he be tasked with helping the company gain a foothold in Europe and expand its brand overseas, along with improving deal selection among other things — but, really, to help Groupon make the transition from high-growth startup to a real, viable public company. The company has continued to disappoint (and underachieve) since going public, so it’s now Raman’s job to help Groupon diversify and shift focus away from its familiar daily-deal territory to more profitable pastures — like Groupon Goods.

Official announcement here.

Photo Credit: Business Wire

During today’s analyst conference call for Groupon’s third-quarter earnings, CEO Andrew Mason mentioned a new feature that’s being tested in a couple of cities. Now, if you look at the deal listings in New York and Chicago, you’ll see a box allowing you to search for specific types of deals, i.e. “pizza” or “lunch.”

Adding site search capabilities might not seem like a huge step forward, but Mason said it’s another way that Groupon can expand beyond its email newsletter. That’s important, he said, because it allows Groupon to sell more deals — as he noted, “You can only put so many deals in an email.” The company has already been trying to move beyond email with services like Groupon Now, but one of the most important channels for this “pull” approach (as opposed to pushing emails to subscribers) is the Groupon website itself.

Groupon already allows you to browse its deals by category, but when you get into really large volumes, the best way to navigate is search. Mason said there are currently “thousands” of deals available on the Chicago and New York sites, and he plans to increase the selection. He also said that increasing the number of deals helps Groupon increase its presence on social networks.

By discussing the feature during the call, Mason suggested that there are still plenty of opportunities for Groupon to grow, despite its lackluster earnings (which he blamed on the company’s performance in Europe).

Groupon just released its Q3 2012 earnings report, marking the company’s first full-year cycle of earnings reports since its IPO in November 2011. The company reported $568.6 million in revenue and a net operating income of $25.4 million.

Net loss attributable to common stockholders of $3.0 million, or $0.00 per share, which included stock-based compensation and acquisition-related expenses of $25.1 million and a diluted share count of 653.2 million, versus a net loss of $54.2 million and a loss per share of $0.18 in third quarter 2011

Ahead of the announcement, most analysts expected the company to post a profit of about $0.04 per share and revenue of around $590 million. Last quarter, Groupon reported revenue of $568.3 million and a net income of $28.4 million.

Groupon sees “continued challenges in Europe”

“Our solid performance in North America was offset by continued challenges in Europe,” said Andrew Mason, CEO of Groupon. “Groupon Goods has evolved into a second major category that our customers clearly love. With deals on everything from designer sunglasses to big-screen televisions to most-wanted toys, we think it will be a great gifting destination this holiday season.”

One thing a lot of analysts will also watch for in this release is how many active customers the company has at the end of this quarter. This quarter, Groupon reported that it had 39.5 million active customers as of September 30, 2012. That’s up 37% from the year-ago quarter

Groupon, of course, had somewhat of a stormy first year on the stock market. The stock was trading around $3.90 before the markets closed today. That’s down roughly 80% from the $20 price the company set for its IPO.

The company itself has also gone through a hard few months as the group buying/daily deals market moves out of its hype phase and into a period of consolidation. Just today, Groupon confirmed that it was laying off about 80 members of its sales team. The company also continues to have legal troubles. Last week, for example, the SEC asked Groupon for more financial disclosures about revenue from its new businesses like merchandise sales. The SEC is also asking Groupon for clarification about why it underestimated how many of its customers would request refunds.

Here are some of the highlights from the report according to Groupon:

• Continued strength in North American revenue growth. North American revenues grew 81% year-over-year, driven by growth in direct revenue, or the amount earned from the sale of products for which Groupon is the merchant of record.
• Rapid growth in Groupon Goods. Groupon Goods reached an annual run rate of nearly $1.5 billion in global billings and nearly $500 million in revenues shortly after its one-year anniversary.
• Improved marketing efficiencies. Customer acquisition costs improved 55% year-over-year, enabling the reduction of marketing spend by 58% compared with the third quarter 2011.
• Subscriber milestone. In the third quarter 2012, the Company surpassed the 200 million subscriber mark.
• Solid growth in active customers. As of September 30, 2012, Groupon had 39.5 million active customers, an increase of 37% year-over-year.
• Growing merchant selection and quality. For the third straight quarter, Groupon featured more than 100,000 unique merchants, with the number of active deals increasing by nearly thirteen times year-over-year to more than 27,000 as of the end of the third quarter.
• Mobile transaction activity remains high. In October 2012, about one third of North American transactions were completed on mobile devices, an increase of nearly 30% compared with October 2011.
• Further expansion of merchant tool suite. In the third quarter 2012, the Company expanded its suite of merchant tools, with the launch of Groupon Payments, as well as Breadcrumb, an iPad-based point-of-sale system for restaurants.