In a blog it just posted, Groupon said its recently hired COO, Margo Georgiadis, “has decided to return to Google (her former employer) in a new role as President, Americas.”

She was only hired in April, just months before the company filed to go public. Georgiadis was previously VP of Global Sales at Google.

(Interesting way to get a better title at the search giant, Margo!)

Georgiadis was in charge of the company’s global sales, marketing and operations at the Chicago-based social buying service.

Sources said that the hiring did not gel on either side.

It might not be Georgiadis’ fault. She replaced Rob Solomon, who was in his job for one year.

And here’s another: PR hire Brad Williams, a longtime Silicon Valley communications exec, who was there and then gone in what felt like 23 minutes.

It seems Groupon does not like Silicon Valley types or, perhaps, vice versa.

Since its IPO filing, in fact, it feels as if it has been a non-stop circus disaster at Groupon.

That has included immense controversy about its sketchy accounting, huge slugs of venture funding going to its founders and a lot of worries about its growth.

Today, in a Friday late afternoon dumping of bad news in hopes that no one notices (I do), Groupon also amended its S-1 public offering filing once again to change revenue metrics and also add a controversial internal letter that CEO and co-founder Andrew Mason sent to employees to counter its many and growing critics.

There appear to be many more shoes dropping soon, said sources, so stay tuned.

Until then, here’s the whole and very terse — for Mason — post:

Update on the Groupon Team

As a fast-growing company, we’ve done a lot of hiring this year, including on our senior executive team. Since the beginning of this year, we’ve made a total of 8 additions — that’s 57% of the total executive team. It would have been great if I could say that we batted 1,000%, but that’s rarely the case; after five months at Groupon, Margo Georgiadis, our COO, has decided to return to Google (her former employer) in a new role as President, Americas.

We’ve built a fantastic team that has proven itself highly capable, so this change won’t have an impact on operations. In fact, we are using it as an opportunity to reorganize in a way that reflects our evolving strategic priorities. Sales, Channels, International, and Marketing will now report directly to me.

Here’s a note from Margo: “Groupon is a great company and I feel privileged to have worked there even for a short time. It was a hard decision to leave as the company is on a terrific path. I have complete confidence in the team’s ability to realize its mission.” We wish her well.

With AsiaD just a little over a month away, Walt Mossberg and I are adding even more speakers to the list, for what we hope will be an awesome event in Hong Kong.

Taking place from Oct. 19 to 21, the conference lineup is already impressive, with a mix of speakers from China, Japan, Korea and Taiwan, as well as Silicon Valley and more.

The previously announced speakers include: Alibaba’s Jack Ma; Google Android head Andy Rubin; Twitter inventor and product guru, as well as Square co-founder and CEO, Jack Dorsey; Nvidia founder and CEO Jen-Hsun Huang; Asus Chairman Jonney Shih; Sony president and second-in-command Kazuo “Kaz” Hirai; Google+ guru Bradley Horowitz; Hollywood big shot Peter Chernin; Huawei’s North American R&D head John Roese; Microsoft’s Windows Phone head Andy Lees; and a panel of start-up stars — Joyus’ Sukhinder Singh Cassidy, SurveyMonkey’s Dave Goldberg and Airbnb’s Brian Chesky.

Now, to add to the kitty:

Yahoo co-founder and former CEO Jerry Yang, who will appear with the Internet giant’s Asia head Rose Tsou. For all of the noise around the company these days, Yahoo has a huge footprint in the region, maintains a big e-commerce business there and holds massive stakes in key firms, such as Yahoo Japan and China’s Alibaba. One of Yahoo’s first big investments came from Asian investor Masa Son, in fact, way back when.

Also on deck is LivingSocial’s CEO and co-founder Tim O’Shaughnessy, who will appear with Daniel Shin, the CEO and co-founder of South Korea’s Ticket Monster, which the daily deals site just bought as part of its aggressive move into Asia. Competing there with its U.S. rival Groupon, as well as a myriad of local social buying services, the market is a tough one.

Because of Samsung’s increasing importance as a global player in smartphones and tablets, we thought it was important to have Dr. Won-Pyo Hong. He heads global product strategy for Samsung’s mobile business, which has surged in the past year to make the Korean tech giant a leader in Android-based phones and tablets, and a significant challenger to Apple.

Also key in the mobile arena is Cher Wang, the chairwoman of three Taiwan companies, including HTC, the important and innovative handset and tablet maker which has been a key player in Android’s success story. But just this week she talked about the possibility of HTC buying an operating system, which would further strengthen its hand in the competitive market.

That’s it for now, but we will have more big names to come, as well as some pretty cool demos we will be putting onstage at AsiaD. So stay tuned.

Here are two videos from an appearance I made on WSJ.com’s Digits show yesterday, talking about the situation at Yahoo and at Groupon.

And, by “situation,” I mean big, honking controversy.

In Yahoo’s case, it is the ouster of CEO Carol Bartz this week from the Silicon Valley Internet giant; with Groupon, it is the delay of the IPO of the social buying service and other related issues.

Here’s the video, which I did with my Ray-Bans in my bedroom at home. (Yes, in pajamas, as any good blogger would.)

And that’s why some are wondering if — especially given the still dicey economic situation and the continued turmoil in the markets — the Chicago-based social buying company might delay or even pull its IPO.

Not so. Yet, at least. But that could change quickly.

Several sources close to the situation said that while Groupon’s management and board have not ruled out such a scenario, they will not make any determination about such a drastic move until after the landscape becomes clearer and also after the summer is officially over tomorrow.

“Clearly, the markets are much different than when Groupon started this public offering process,” said one person who is familiar with the internal debate within the company. “But no one can get a real sense of whether it gets better or worse for the next few weeks — that’s where the real questions begin.”

It’s not a bad thing for Groupon to be asking.

While gaming start-up Zynga, in comparison, ferrets away quietly on its way to an IPO, Groupon has been getting a daily smackdown on one of the many issues that seem to have captured the — mostly negative — attention of investors and the media.

Among the topics most mentioned: Groupon’s controversial accounting called ACSOI, or adjusted consolidated segment operating income; questions about its growth prospect in more mature markets; worries about whether the company can cut its marketing costs and still retain customers; and whether it will garner the giant valuations, once upward of $15 billion, that have been bandied about.

Aside from defending itself in a recent email sent to employees from its CEO Andrew Mason, Groupon cannot give complete public answers to these questions until after its IPO, due to regulatory rules.

While Mason’s damn-the-torpedoes missive seemed to be trying to communicate a strong confidence in the company, it’s clear that all the attacks on the company have become frustrating for him.

His internal communication, which was published here first, has also attracted more controversy, and some have suggested it violates regulatory rules.

So far, although it seems likely, the Securities and Exchange Commission has not commented on the email.

To: Everyone

Re: The Memo

There was a whole lot of hubbub last week about an internal email that Groupon’s CEO and co-founder Andrew Mason sent out to the employees of the Chicago-based social buying company, which AllThingsD got hold of and published.

A lot of the noise centered less around the content of the memo — which sought to answer back at Groupon’s growing chorus of ever-noisier critics, who have been relentlessly pillorying the company over a range of financial issues since it filed for an IPO in June — than on the hows and whys of its release.

And, of course, whether the email would get Groupon into trouble with the Securities and Exchange Commission over whether Mason had touted the company in violation of regulatory disclosure rules.

News of that happening or not will come sooner than later, I suspect, but it is my impression that the very release of Mason’s defense of Groupon in a missive sent out to thousands of staffers — Hey, Henry, how is it that you didn’t get the memo? — says one clear thing about the sentiment of the company’s leadership.

And that is: They could not be more pleased at finally having their say and they couldn’t care less about anything other than being able to strike a blow against the withering attacks.

There are several reasons for this, according to many sources I spoke with this week about the fallout from the email, most of which center around the impact of the negative press on employee morale and the ability to attract new talent.

“It’s made it very difficult for those working at Groupon,” said one source. “But, worse, is how much our reputation is getting burned in the eyes of young engineers we need to recruit.”

What management at the company does not seem to be as worried about, said sources, is investor disinterest when it comes time to hawk and price the public offering.

While the general Wall Street turbulence might spell a lower valuation, sources said Groupon’s execs and board expect to be oversubscribed when it finally gets out on the market.

That’s why Mason — along with some detailed defenses of Groupon’s most controversial issues — tossed off gems like this one:

“For now we must patiently and silently endure a bit more public criticism as we prepare to birth this IPO baby — a breed for which there are no epidurals.”

Since I do happen to know about birthing babies (and Mason decidedly does not): Ouchie!

We’ll see soon enough exactly who will be feeling that pain.

Until then, here’s the classic didn’t-you-get-the-memo movie clip from the hilarious “Office Space”:

While they are only small transactions, two of Yahoo’s top execs — Americas head Ross Levinsohn and its Chief Product Officer Blake Irving (pictured here) — seem to have forked over their own dough to buy shares of the troubled company.

Levinsohn and Irving — like a lot of other Yahoos in the same leaky boat — have lots of stock options in the Silicon Valley Internet giant that are likely very much underwater these days. They also have hundreds of thousands of cost-free restricted stock units.

Still, with Yahoo shares in a free fall, the pair apparently bellied up to the bar and purchased stock directly last Friday and on Monday, according to required insider filings.

Levinsohn bought 10,000 shares at $11.61 and Irving got 10,000 at $11.23.

It seems they are the only high-ranking execs who have bought Yahoo stock in a while, including its CEO Carol Bartz, without some link to shares they have been given by the company and via programmed or automatic purchases and sales.

Executives buying shares of their own company often are an indicator of confidence in the company, and CEOs — such as AOL CEO Tim Armstrong has — often do it in dicey times to make a statement of belief in its prospects.

It will be interesting to see if other Yahoo top execs do the same.

Yahoo could certainly use the boost. Shares are down 23 percent since the beginning of the year, giving it an affordable $16.7 billion market valuation.

Still, while both men initially lost money in the current market turmoil that has also hit Yahoo hard, they seem to be up about $10,000 each, for now, on their approximately $110,000 bets that Yahoo shares are too low.

Its stock closed up today 9.3 percent, at $12.86.

As All Things Digital reported last week, Groupon filed an amended S-1 IPO offering this morning, in which it deemphasized a controversial accounting method.

Instead of a metric called ACSOI, or adjusted consolidated segment operating income, the Chicago-based social buying company noted that gross profit was the “important indicator for our business, because it is a reflection of the value of our services to our merchants.”

But the dreaded ACSOI — which leaves out important costs of marketing — is not completely gone. In its filing, Groupon said it would use it internally, noting:

We exclude those costs because, unlike our other marketing expenses, they are an up-front investment to acquire new subscribers that we expect to end when this period of rapid expansion in our subscriber base concludes. While we track this management metric internally to gauge our performance, we encourage you to base your decision on whatever metrics make you comfortable.

In other words, for the love of Pete, please ignore ACSOI completely.

Groupon also included new financials in its filing for the quarter, with a 36 percent increase in revenue to $878 million from the previous quarter and double a year ago. But its loss was $102.7 million, compared to a loss of $35.9 million a year ago.

The company also reported that its subscribers grew from 10.4 million last year to 115.7 million now.

Costs are also lower by eight percent in the new quarter, with Groupon spending $165.2 on marketing to new subscribers, compared to $179.9 million in the previous one.

The filing with the Securities and Exchange Commission is a critical one for Groupon, whose public offering has been mired in questions about how it accounts for its financial performance.

Of particular concern: ACSOI, which is a number that does not include important costs, such as critical online marketing expenses to attract new customers to Groupon.

Such accounting is called non-GAAP (generally accepted accounting principles).

In 2010, Groupon reported that it lost $413.4 million using standard accounting practices. When it excludes some costs from its calculations using ACSOI — including online marketing expenses to attract new customers — it recorded a profit of $60.6 million in 2010.

The new results were stronger, to be sure. Such growth is important, especially given investor scrutiny of Groupon in the current economic turmoil.

As I wrote last week:

And, indeed, questions from the media, investors and, most importantly, the Securities and Exchange Commission about how Groupon accounts for its revenue and profits using ACSOI were swift and decidedly negative.

Hence, a furious debate — along with much internal tension — within Groupon about what to do. At first, in another S-1 amendment, the company backed away from using ACSOI as a “valuation metric.”

But that was apparently not enough for the SEC or anyone else, so Groupon’s top managers finally thought it best to rid itself of the term entirely.

Presumably, with a cleaner S-1, Groupon can concentrate on a whole new set of issues around its IPO, such as the tumultuous state of the markets.

According to numerous sources close to the situation and after regulatory pressure, Groupon will amend its S-1 public offering filing to remove references to an unusual accounting treatment that has attracted controversy.

Sources said the new filing by the social buying company, which is helmed by CEO and co-founder Andrew Mason (pictured above), will likely occur as early as Monday.

It can’t come a minute too soon regarding a metric called ACSOI, or adjusted consolidated segment operating income, which the Chicago-based Groupon used when it filed its S-1 documents in June.

As I wrote at the time about the odd use of ACSOI:

Let’s be clear, this is a number that does not include important costs, such as critical online marketing expenses to attract new customers to Groupon.

Such accounting is called non-GAAP (generally accepted accounting principles).

In 2010 and the first quarter of 2011, Groupon said its Adjusted CSOI was $60.6 million and $81.6 million, respectively.

On a GAAP basis, Groupon lost $413.4 million for 2010 and $113.9 million in the first three months of 2011.

And, indeed, questions from the media, investors and, most importantly, the Securities and Exchange Commission about how Groupon accounts for its revenue and profits using ACSOI were swift and decidedly negative.

Hence, a furious debate — along with much internal tension — within Groupon about what to do. At first, in another S-1 amendment, the company backed away from using ACSOI as a “valuation metric.”

But that was apparently not enough for the SEC or anyone else, so Groupon’s top managers finally thought it best to rid itself of the term entirely. That will happen next week, sources said.

And, in coming weeks, sources added, the company will be filing additional financial information about both its growth and costs, which will undoubtedly also be put under a microscope by the media, investors and regulators.

A Groupon spokesman declined to comment when asked about the removal of ACSOI from its public offering documents.

As luck would have it, I was in South Korea this week and was able to talk to Daniel Shin, the CEO and co-founder of Ticket Monster, this country’s largest social buying site, which was acquired by LivingSocial yesterday.

Shin is a big Internet star in this digitally connected Asian country, even though he only recently returned to start Ticket Monster a year ago.

He lived in Korea until he was nine years old, when his family moved to the U.S. to live. Shin stayed through college and worked at several jobs before coming back.

Since then, Shin and his colleagues have grown Ticket Monster at a frightening pace. In the past year, the company known popularly in South Korea as TMon has grown rapidly to 600 employees, 60 deals a day and from virtually no revenue in May 2010, when it was founded, to $24 million last month.

Here’s a video interview that I did with him in Seoul — with a guest appearance by Walt Mossberg — about that and more, including the differences between the explosive online commerce market here and elsewhere:

]]> http://allthingsd.com/20110802/ticket-monsters-daniel-shin-talks-about-sale-of-south-koreas-biggest-deals-site-to-livingsocial-video/feed/ 0 http://allthingsd.com/20110727/not-so-much-on-groupon-ipo-delay-but-sec-scrutiny-still-a-drag/ http://allthingsd.com/20110727/not-so-much-on-groupon-ipo-delay-but-sec-scrutiny-still-a-drag/#comments Wed, 27 Jul 2011 18:51:13 +0000 Kara Swisher http://allthingsd.com/?p=103279

Earlier today, CNBC reported that the regulatory review of Groupon’s questionable use of certain accounting metrics in its IPO filing was delaying its offering until later in September.

While more questions from the Securities and Exchange Commission about how it accounts for its revenue and profits might indeed eventually push the IPO debut out, according to sources I have interviewed for months now, an offering in mid to late September was actually when the social buying company was planning to take its company public.

It makes sense, since August is seldom used for road shows for companies headed for an IPO — think Wall Street in the Hamptons and you’ll get why.

That said, the continued scrutiny by the SEC is not a welcome development for Chicago-based Groupon, which filed its S-1 documents in June.

In coming weeks, sources said, the company will be filing new financial information about both its growth and costs, which will undoubtedly be put under a microscope by investors and regulators.

That’s no surprise since the contents of the original filing immediately caused controversy, especially over the amount of its venture funding paid out to insiders and also over an unusual accounting treatment called adjusted consolidated segment operating income, or Adjusted CSOI.

As I wrote at the time:

Let’s be clear, this is a number that does not include important costs, such as critical online marketing expenses to attract new customers to Groupon.
Such accounting is called non-GAAP (generally accepted accounting principles).

In 2010 and the first quarter of 2011, Groupon said its Adjusted CSOI was $60.6 million and $81.6 million, respectively.

On a GAAP basis, Groupon lost $413.4 million million for 2010 and $113.9 million in the first three months of 2011.

Said Groupon about its accounting in its S-1 filing: “We believe Adjusted CSOI is an important measure of the performance of our business as it excludes expenses that are non-cash or otherwise not indicative of future operating expenses.”

Definitely sketchy enough to attract an SEC look-see, which caused Groupon to back away from Adjusted CSOI as a “valuation metric” in a recently amended S-1 filing. Groupon also stepped back a sloppy comment made after the filing by its Chairman Eric Lefkofsky — in a interview he apparently thought was off the record — that the company would be “wildly profitable.”

One thing is certain: There will surely be more amending of the Groupon S-1 in the weeks ahead as it stumbles toward its IPO, which will be one of the most prominent of the Web 2.0 era.

]]> http://allthingsd.com/20110727/not-so-much-on-groupon-ipo-delay-but-sec-scrutiny-still-a-drag/feed/ 0 http://allthingsd.com/20110709/groupon-updates-privacy-rules-including-on-mobile-tracking-and-sharing-of-personal-information/ http://allthingsd.com/20110709/groupon-updates-privacy-rules-including-on-mobile-tracking-and-sharing-of-personal-information/#comments Sun, 10 Jul 2011 06:33:10 +0000 Kara Swisher http://allthingsd.com/?p=96006

Groupon sent out emails to its users this weekend, about changes it has made to its privacy statement and terms of use.

Among the most notable changes is more information about the Chicago-based social buying start-up’s collection and use of mobile location information.

Said Groupon:

“In short, if you use a Groupon mobile app and you allow sharing through your device, Groupon may collect geo-location information from the device and use it for marketing deals to you (and for other purposes listed in the “How Groupon Uses Personal Information” section of the Updated Privacy Statement).”

In other words, if you let them, in order to improve the experience and make the Groupon Now app more useful, you’re being tracked.

This, of course, has been a dicey issue of late, most recently related to Apple and Google smartphones and what information they collect and retain.

In addition, with a pending IPO, Groupon is under all kinds of scrutiny and any big changes will be closely studied.

In addition, in its email to customers (see below in its entirety), the company said that it had broadened the definition of personal information to include your interests and habits and also that it may share that personal information with partners in new offering areas, such as travel deals with Expedia.

Groupon said it was also trying to improve readability of its consumer information and give greater transparency to its customers.

Here is the whole Groupon memo about the changes:

Wondering about Changes to the Groupon Privacy Statement?

We want to tell you a little more about some material changes we just made to the July 22, 2010 version of the Groupon Privacy Statement (the “Old Privacy Statement”) to create the new Groupon Privacy Statement (the “Updated Privacy Statement”).

In general, all of the changes to the Updated Privacy Statement were made to improve readability, provide greater transparency about our information handling practices, address some new types of relationships Groupon is forging and new technologies Groupon is using or may use, and to let you know about the privacy choices you have. Read on.

* Groupon continues to be a proud member of the TRUSTe Privacy Program. The Updated Privacy Statement contains a reference to the most current version of the TRUSTe Program Rules and includes some additional statements required by those Program Rules. As a TRUSTe Privacy Seal holder, Groupon is committed to complying with the Program Rules as applicable to its online privacy program.

* The Updated Privacy Statement replaces the phrase “Personally Identifiable Information” with “Personal Information” to improve readability and accuracy. (More on this below.)

* The Updated Privacy Statement clarifies that Personal Information is any information that could be used to identify, locate or contact an individual. This definition is broader than the definition in the Old Privacy Statement, which limited the concept of personally identifiable information to identification information in the context of certain defined identification activities. (Whew!) The broader definition in the Updated Privacy Statement reflects our dedication to protecting privacy in all areas of our business.

* The Updated Privacy Statement includes a definition of Personal Information and explains the types of Personal Information collected, used and disclosed by Groupon, namely “Contact Information,” “Relationship Information,” “Transaction Information,” “Financial Account Information,” and “Mobile Location Information.” These definitions provide more meaningful definition about the types of information we collect and how we classify information internally.

* The Updated Privacy Statement has shortened the section that goes on about how we use and disclose non-identifiable information. This change was made to improve readability so we could focus more on talking about what we do with Personal Information.

* The Updated Privacy Statement contains information on Groupon’s collection and use of Mobile Location Information. In short, if you use a Groupon mobile app and you allow sharing through your device, Groupon may collect geo-location information from the device and use it for marketing deals to you (and for other purposes listed in the “How Groupon Uses Personal Information” section of the Updated Privacy Statement).

* The Updated Privacy Statement presents Groupon’s disclosures of Personal Information in a more detailed and transparent fashion. The new “When and Why Groupon Discloses Personal Information” section of the Updated Privacy Statement details the circumstances when Personal Information is shared with third parties in a comprehensive, bulleted-list format. This section reinforces Groupon’s commitment to protect privacy by generally limiting disclosures of Personal Information to our affiliates and services providers and to those merchants and business partners with whom our users interact.

* The Updated Privacy Statement omits the section in the Old Privacy Statement regarding disclosures of Personal Information to Google for remarketing purposes. Groupon does not provide Personal Information to Google for remarketing.

The Old Privacy Statement’s section on “Data Tracking” has been replaced with an expanded section on “Cookies and Related Technologies” to provide greater transparency around data collection technologies. This section contains information about all of the ways that we collect information using automated technologies, including cookies, pixel tags, web beacons, browser analysis tools, and web logs. The section is designed to educate readers about the types of data collected by each technology as well as how the data is used by Groupon. The Updated Privacy Statement clarifies that if automatically-collected data is associated with Personal Information, it is protected by the Updated Privacy Statement. This section also provides information about third party advertising relationships in a more readable form and includes a new paragraph regarding our relationship with Omniture.

* The Updated Privacy Statement contains an expanded section on user choice. The “Your Choices” section in the Updated Privacy Statement provides readers with information on many different types of privacy choices that they can make, along with instructions for exercising the choice. This section also consolidates information on choices that was distributed throughout the Old Privacy Statement and contains a new link to the TRUSTe preferences page.

* The Updated Privacy Statement’s section on “Security of Personal Information” has been streamlined to more-simply state our commitment to maintaining a reasonable information security program with expected administrative, technical and physical controls.

* The Old Privacy Statement’s section “Updating and Correcting Personal Information” has been replaced with a new section “Accessing and Correcting Personal Information.” This section has been revised to improve readability and clarify the processes by which users can access, update and delete their Personal Information. This section of the Updated Privacy Statement also contains a new paragraph regarding data retention. This paragraph was added for clarity and to comply with the TRUSTe Program Rules.

* The Updated Privacy Statement contains a new section giving “Notice to Residents of Countries Outside of the United States of America.” This section educates international users about the fact that Groupon is based in the U.S. so Personal Information may be transferred to the U.S. for processing.

* The “Miscellaneous Privacy Issues” section in the Old Privacy Statement has been deleted and the content it contains has been included in more appropriate, descriptive sections elsewhere in the policy. Also, we omitted the section discussing children’s information because Groupon is not designed for children and the Groupon deals are not offered to individuals under the age of majority in their states of residence. See our Terms of Use.

* The Updated Privacy Statement introduces a new contact mechanism for privacy-related inquiries: privacy@groupon.com. While general customer service questions should still be directed to support@groupon.com, the new address provides a way for us to respond to questions that our users have specifically about the privacy of their Personal Information.

And here is the email sent to users, titled “Updates to Privacy Statement and Terms of Use”:

We wanted to let you know that we’ve updated both our Privacy Statement and our Terms of Use. These new terms, which affect all Groupon users, accommodate our new products and services that allow us to offer you more relevant deals.

If you don’t feel like wading through long legal documents, here’s a summary of the notable changes, in plain English:

We’ve clarified that Groupon Now! and our other mobile apps may collect geo-location data. This lets us present you offers that are close by. See Sections 1 and 5 of the Privacy Statement.

We’ve broadened the definition of “personal information” to include your interests and habits, and provided additional details about how we collect and use your information. We’ve done this so that we can better understand what types of offers you’ll find valuable. See Section 1 of the Privacy Statement.

You may know that we’ve started working with partners to offer Groupon users new deal categories — for example, travel deals with Expedia. Our new privacy statement explains that we may share your personal information with these partners if you subscribe to special communications or buy deals in these new deal categories. See Section 4 of the Privacy Statement.

We’ve updated our Terms of Use to help you understand the expiration policies for different vouchers, including Groupon NOW! vouchers. This explains, for example, that if you don’t use a Groupon NOW! voucher within 30 days we’ll refund the purchase amount. See Section 7 of the Terms of Use.

We also clarified our expectations to ensure that our customers and visitors use the services on our website in a way that keeps the experience good for everyone. For example, we’ve prohibited abusive practices like opening multiple accounts, submitting false information and other practices that we think detract from everyone’s experience with us. See Section 5 of the Terms of Use.

]]> http://allthingsd.com/20110709/groupon-updates-privacy-rules-including-on-mobile-tracking-and-sharing-of-personal-information/feed/ 0 http://allthingsd.com/20110707/worried-about-ipo-filing-backlash-groupon-surveys-consumer-and-merchant-reaction/ http://allthingsd.com/20110707/worried-about-ipo-filing-backlash-groupon-surveys-consumer-and-merchant-reaction/#comments Thu, 07 Jul 2011 10:05:35 +0000 Kara Swisher http://allthingsd.com/?p=95259

Groupon’s S-1 filing for an IPO last month certainly got a lot of ink.

Unfortunately, much of it was negative, focused on several controversial parts of the document. Most scrutinized were large slugs of money taken out of the social buying site by its founders, as well as aggressive accounting terminology to make large losses look less, well, large.

Rattled by the intense media and analyst reaction to the filing, sources said the Chicago-based company commissioned a poll of its consumers and merchants to gauge the impact.

One source familiar with the survey said that top execs and its board wanted concrete reaction from key constituencies, instead of relying on “noise from the echo chamber” of Wall Street and Silicon Valley.

And, said several people who had seen the poll, it should probably come as no surprise that the impact of the drumbeat of Groupon-is-doomed news on merchants and consumers was low, with only one percent saying that they had formed a negative opinion of the company from the filing.

That, of course, does not mean that those important groups for Groupon aren’t disgruntled about a whole laundry list of other issues.

But — for now, at least — an S-1 with some warts isn’t one of them.

Whatever the case, Groupon will continue to face scrutiny as it moves to amend the filing after comments from government regulators, and also when it reports its latest financial results soon for the three months ended June 30, 2011.

And those are numbers that everyone will surely be paying attention to.

]]> http://allthingsd.com/20110707/worried-about-ipo-filing-backlash-groupon-surveys-consumer-and-merchant-reaction/feed/ 0 http://allthingsd.com/20110705/yes-that-is-a-cat-on-the-head-of-a-soon-to-be-public-company-ceo-and-of-course-its-groupons-andrew-mason/ http://allthingsd.com/20110705/yes-that-is-a-cat-on-the-head-of-a-soon-to-be-public-company-ceo-and-of-course-its-groupons-andrew-mason/#comments Tue, 05 Jul 2011 23:11:04 +0000 Kara Swisher http://allthingsd.com/?p=94668

Do you think Zynga’s Mark Pincus would put a cat on his head for a national magazine shoot? Or LinkedIn’s Jeff Weiner? Or, perish the thought, Mark Zuckerberg of Facebook?

But the wacky stylings of Groupon CEO and co-founder Andrew Mason seem to demand it.

Thus, straight-faced, he appears in a very long article, titled “Letter From Chicago: Groupon Therapy,” in this month’s Vanity Fair magazine with a very fat tabby cat clawing onto his noggin.

There’s also a shot of Mason in the equally kooky “Michael’s Room” at Groupon HQ and the expected plethora of ironic hipster anecdotes, such as the opening one about Mason almost giving a spotted pony to New York City Mayor Michael Bloomberg on a visit.

According to the piece:

“He had originally planned to give the mayor a puppy, but decided that a pony would be even more memorable. ‘I mean, it’s such a heavy thing to gift someone,’ he said, laughing. ‘I thought it would be funny to give it to somebody as busy as the mayor.’”

Buuuuurnnn!

Otherwise, it runs through all the whistlestops of the basic Groupon story — about its aggressively non-corporate nature, the pros and cons of using the social buying service, the insidious copycat competitors, the famously rejected $6 billion Google acquisition offer and, finally, the splashy upcoming IPO.

Also, as usual, the fretful worries about Groupon’s staying power, as evidenced by the Emma Stone-tastic cover tagline:

“Is Groupon This Year’s Facebook? (or Next Year’s Pets.com?)”

How about let’s be a little more creative and say neither.

Moving along, of course, plenty about the lovable Yogi Bear of a CEO, Mason, who apparently plays the accordion (who knew?), but who one close friend insisted was also highly disciplined and serious.

Of course he is, but not for lack of trying to seem not so much that way.

As he is quoted in Vanity Fair telling a group of new Groupon employees at an orientation session: “As we get bigger, instead of being like most companies, conforming and becoming more normal, we want to become weirder.”

With that cat on his head, this month at least: Mission accomplished, Andrew!

You can also check out more Mason funster times in this video of a very entertaining interview I did with him at the ninth D: All Things Digital conference recently:

(Photo credit: Martin Schoeller, exclusively for Vanity Fair.)

]]> http://allthingsd.com/20110705/yes-that-is-a-cat-on-the-head-of-a-soon-to-be-public-company-ceo-and-of-course-its-groupons-andrew-mason/feed/ 0 http://allthingsd.com/20110629/what-to-expect-when-youre-expecting-a-zynga-ipo-insider-selling-natch/ http://allthingsd.com/20110629/what-to-expect-when-youre-expecting-a-zynga-ipo-insider-selling-natch/#comments Wed, 29 Jun 2011 15:07:46 +0000 Kara Swisher http://allthingsd.com/?p=92568

So exactly how fecund is “FarmVille”?

If reports hold, we’ll all find out today what the yield is from the online gaming phenom Zynga, which will finally be filing its regulatory documents sometime today.

The S-1 for a public offering valued at up to $20 billion, which will contain all kinds of juicy information about the San Francisco-based start-up’s business, is likely to come out after the markets close. Zynga is expected to raise $2 billion in the offering.

Before everyone gets to see what’s in it, there’s a lot that investors should be looking out for, based on recent IPO filings by similar companies, such as Groupon.

Digging Up New Accounting Ground

As Tricia Duryee pointed out, Zynga will be the “first major U.S. company supported primarily by the sale of virtual goods” to file.

That’s what will likely make the Zynga filing very interesting, from an accounting point of view.

How Zynga handles its accounting is sure to be much scrutinized, especially since Groupon attracted all kinds of ugly from its unusual treatment of its financial results.

To defocus from its money-losing under GAAP acounting, the Chicago-based social buying service used the more attractive “Adjusted CSOI,” which is defined as adjusted consolidated segment operating income.

My definition: Sketchy!

Zynga’s finances are expected to look better, reportedly generating about $400 million in profit last year on about $850 million in revenue.

It will be important to pay attention to the breakdown of those revenues and about what period of time the company accounts for them.

As Duryee wrote, Zynga has several choices:

Game-based model: The company recognizes revenue over the life of the game.

User-based model: Revenue is recognized over the estimated life a user plays the game.

Item-based model: Revenue is recognized based on the implied or explicit life span of the item — in other words, how long it would last in the real world. Examples of more durable goods are virtual vehicles, furniture or weapons. Revenue from these would be recognized for as long as the player stays active in the game. Revenues from a more consumable item, like a virtual cup of coffee or a jolt of energy, would be recognized almost immediately.

And there are still other factors to take into consideration, such as whether the goods were paid for with virtual currency or real cash, and how much information a company has for establishing the averages.

In the Revenue Weeds

Another interesting thing to study will be the revenue breakdown for Zynga, especially as it relates to its biggest platform provider, Facebook.

Such as: How many in-game items are purchased directly on Facebook versus through gift cards purchased in the store? How big (or small) is Zynga’s advertising business? What about mobile games? Will the profitability of individual games be called out, with details about their performance?

And, of all its various distribution platforms for its games, where does it get the most mojo?

That’s important, since Zynga will be seen as a proxy for Facebook’s business. Thus, a lot of investors might find some nuggets of information, since the pair are so tightly intertwined as businesses.

Facebook, of course, has been famously trying not to IPO, so any indication of the social networking site’s business will be carefully studied.

Reaping the Insider Rewards

Lastly, it’ll be important to see who is selling what and when among current Zynga investors.

Groupon ran into a buzz saw of criticism from the giant payouts its founders took out of the company from its massive venture funding rounds.

As Peter Kafka wrote:

Groupon raised a total of $946 million in two funding rounds last winter. It kept $136 million of it to help run the money-losing company. The remaining $810 million was paid out, via stock purchases, to CEO Andrew Mason and some of his backers, including Eric Lefkofsky, and, notably, the Samwer brothers, who sold their CityDeal company to Groupon in 2010 … Of note: This wasn’t the first time Groupon had raised money and taken cash off the table. In April 2010, the company raised $130 million, and handed $120 million to many of the same people.

My definition: Even sketchier!

Along with its founder and CEO Mark Pincus, Zynga investors are the pantheon of venture players, including Digital Sky Technologies, Kleiner Perkins, Union Square Ventures and angel investors LinkedIn founder Reid Hoffman and Peter Thiel.

How much Pincus and others inside the company have taken out and are selling should be one of the first places new investors should look.

Because with the hyped valuations that many of these Web 2.0 companies are getting, who’s zooming who should be a key sign to pay mind to.

]]> http://allthingsd.com/20110629/what-to-expect-when-youre-expecting-a-zynga-ipo-insider-selling-natch/feed/ 0 http://allthingsd.com/20110628/the-death-stare-stylings-of-groupons-andrew-mason-the-full-d9-interview-video/ http://allthingsd.com/20110628/the-death-stare-stylings-of-groupons-andrew-mason-the-full-d9-interview-video/#comments Tue, 28 Jun 2011 14:02:30 +0000 Kara Swisher http://allthingsd.com/?p=91835 It is indeed true that when he did not want to answer any question I posed, Groupon CEO and co-founder Andrew Mason stared at me in hopes that laser beams would come out of his eyeballs.

They didn’t, but that does not mean it’s not worth watching his attempt.

In fact, if you want to get a good idea of the shaggy, goofy and unique personality of Groupon, this interview with Mason at the ninth D: All Things Digital earlier this month should provide some insight about the social buying phenom.

How it navigates its upcoming IPO and deals with competitors such as Google going forward are some of the many topics I covered with Mason in the video below:

]]> http://allthingsd.com/20110628/the-death-stare-stylings-of-groupons-andrew-mason-the-full-d9-interview-video/feed/ 0 http://allthingsd.com/20110613/talk-about-discounting-groupon-gets-a-pre-ipo-smackdown/ http://allthingsd.com/20110613/talk-about-discounting-groupon-gets-a-pre-ipo-smackdown/#comments Mon, 13 Jun 2011 13:15:54 +0000 Kara Swisher http://allthingsd.com/?p=85870

It has only just announced its IPO plans, but Groupon is already getting a bitter taste of the brutality of being more public in an increasing series of negative reports aimed at its business prospects and execs.

That has included a spate of posts after it filed to go public last week about the unusual accounting treatment in an S-1 regulatory filing for the offering, which also showed a large outflow of its venture funding to the pockets of the Chicago-based social buying site’s founders.

Since then, though, the gloves seem to be off for Groupon, just as it starts to market itself to Wall Street investors.

Perhaps the toughest so far has been one written by Fortune’s Kevin Kelleher, painting a very sketchy investing portrait of the company’s Chairman and co-founder Eric Lefkofsky.

Wrote Kelleher in a piece titled “The Checkered Past of Groupon’s Chairman”:

But Groupon’s IPO has brought an uncomfortable spotlight onto Lefkofsky. While some attention focuses on his ambitions as an investor in tech start-ups, others see a “spotty history” and draw parallels between the past and the present. Lefkofsky’s track record, reflecting failures and successes, bears certain hallmarks: Rapid revenue growth accompanied by big losses, a penchant to sell stock early on, and lawsuits filed by investors, lenders or customers who feel they have been wronged.

Ouch.

While one of the lawsuits mentioned in the piece was dismissed with prejudice, it did not help that the piece included an early email used in the case, written by Lefkofsky in the Web 1.0 era, that read in part:

“Lets start having fun…lets get funky…let’s announce everything…let’s be WILDLY positive in our forecasts…lets take this thing to the extreme…if we get wacked [sic] on the ride down-who gives a shit…THE TIME TO GET RADICAL IS NOW…WE HAVE NOTHING TO LOSE…”

Double ouch, even if it is probably a bit unfair to use such rookie remarks from a young entrepreneur back then to reflect on him today.

Still, Lefkofsky — whom I met with recently at Groupon’s HQ and found as whip-smart and savvy as any Silicon Valley sharpie — does seem to need to be more circumspect in his utterances today.

Most specifically, the day after its IPO filing, he told Bloomberg in an interview that Groupon will be “wildly profitable,” referencing worries about losses unveiled in its financial statements and his past record of start-ups.

Said Lefkofsky on June 3:

“I’m going to be in technology for a long time. I’m going to start a lot of companies. These are not sham companies. These are great businesses. InnerWorkings is profitable. Echo is profitable. Groupon is going to be wildly profitable.”

While sources said it is unlikely that Groupon will be forced by the Securities and Exchange Commission to make a new filing due to the remarks, it’s just the kind of mistake the typically voluble company needs to avoid going forward.

In other words, no more words from Groupon.

]]> http://allthingsd.com/20110613/talk-about-discounting-groupon-gets-a-pre-ipo-smackdown/feed/ 0 http://allthingsd.com/20110608/exclusive-former-yahoo-brad-williams-take-over-as-pr-head-honcho-at-groupon/ http://allthingsd.com/20110608/exclusive-former-yahoo-brad-williams-take-over-as-pr-head-honcho-at-groupon/#comments Wed, 08 Jun 2011 18:08:37 +0000 Kara Swisher http://allthingsd.com/?p=84420

A Chicago boy is going home, as former Yahoo PR exec Bradford Williams takes over as VP of Global Communications at Groupon.

Williams, who worked at Yahoo during its ugly takeover fight with Microsoft, will need his even-keeled personality more than ever now, as the social buying phenom heads into its upcoming IPO.

Groupon has gotten a lot of flack for the unusual accounting in its recent S-1 public offering filing, as well as for the huge amount of money that some of its founders have taken out of the company.

And its CEO Andrew Mason is also, well, somewhat of a death-staring character.

Williams has longtime tech experience, having also worked at VeriSign, eBay and Gateway.

He is one of many former Silicon Valley hires that Groupon has made of late, including several from Yahoo and also Google.

(By the way, that’s me calling on the other line, Brad, so get ready to pick up a lot.)

]]> http://allthingsd.com/20110608/exclusive-former-yahoo-brad-williams-take-over-as-pr-head-honcho-at-groupon/feed/ 0 http://allthingsd.com/20110524/exclusive-zynga-about-to-file-for-ipo/ http://allthingsd.com/20110524/exclusive-zynga-about-to-file-for-ipo/#comments Tue, 24 May 2011 22:32:43 +0000 Kara Swisher http://allthingsd.com/?p=77680

Zynga is poised to file for its initial public offering, according to sources close to the situation.

The filing with the Securities and Exchange Commission could come as early as this week, or next week at the latest.

The move is not entirely unexpected, given how well the recent IPOs of several Internet companies have done recently, including business networking site LinkedIn last week and Russian search giant Yandex today.

Their strong performances show the huge investor appetite for fast-growing and high-profile Web 2.0 firms. Wall Street is also prepping for eventual public offerings from social buying site Groupon and, the big fish, Facebook.

Zynga’s valuation in its last round of funding was $10 billion, but it is likely to price itself higher in an offering.

After all, LinkedIn now has a market valuation of $9 billion, double its pre-IPO price.

Whatever the price, a Zynga IPO is a major coup, especially given how quickly it has morphed into one of the most important forces in online gaming, largely via distribution on the Facebook platform.

The company claims that it has 250 million people actively playing its games every month. Its largest game currently is CityVille, which attracts 90 million monthly users, reports AppData. Its original Poker game still manages to attract 35 million monthly users.

Its early titles, such as FarmVille and Mafia Wars, first vaulted the San Francisco-based company into consumer prominence, and it has recently struck a number of high-profile branding deals with Lady Gaga and the makers of the upcoming animated movie “Kung Fu Panda 2,” among others.

That’s also meant a solid business. Zynga reportedly generated about $400 million in profit last year on about $850 million in revenue, although sources said the filing will reveal much more robust numbers.

The company has also grown its work force quickly. Last year, Zynga hired more than 800 people and today has more than 1,500 full-time employees in 13 offices, spanning six countries.

Recently, at the opening of its new Seattle office, its founder and CEO Mark Pincus–who has tried to hit the start-up jackpot many times before–said he had Amazon-sized ambitions for Zynga, referring to that city’s online retail giant.

Depending on how the offering goes, he might want to think bigger.

Sources said Goldman Sachs will be among the lead bankers in the Zynga offering.

Zynga declined to comment on its IPO plans.

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