Accel Partners has added longtime tech exec Rob Solomon — who was most recently president and CEO of Groupon — as a venture partner. The high-profile Silicon Valley venture firm said Solomon will focus on early stage and growth equity opportunities and focus on “operational issues like product management, scaling infrastructure, business operations, and mergers and acquisitions.”

Said Accel Partner Andrew Braccia in a statement: “[Solomon] has been at the helm of some of the most high profile consumer internet brands and has demonstrated a unique ability to inspire and lead teams through both rapid growth and challenging times.”

Indeed, Solomon has had a long Silicon Valley career, including as an top exec at Yahoo, running its e-commerce efforts. He was also CEO of SideStep, a real-time vertical search engine in the travel sector that was later sold to Kayak and is also on several boards, including HomeAway.

But Solomon is best known for his stint as the No. 2 exec at the Chicago-based Groupon, the once high-flying daily deals site. But, for a variety of reasons, including wanting to be located in California, he left the company two years ago.

Solomon emailed me last night to explain why he decided to take a job as a VC at Accel and here’s what he wrote:

“I love the tactics and strategies associated with scaling up Internet companies. Nothing is more exciting then digging deep into a space and then figuring out which companies stand the best chance to create new markets and become iconic category defining companies. I was lucky enough to work with some of the world’s best founders, technologists and executives at Yahoo and that experience taught me what is possible in a very short span of time. I’ve joined Accel because they have an incredible global platform to find, nurture, fund and grow the next generation of global iconic Internet companies and nothing could be more exciting to me for my next career adventure.”

After a massive breach of its computer systems yesterday, LivingSocial has sent out emails to all of the 50 million customers impacted, a company spokesman said, and is now working with law enforcement in an investigation to help find the perpetrators.

The company declined to give more information about how the hackers might have entered the Washington, D.C., daily deals company’s system to get access to names, emails, birthdates and encrypted passwords. But it did note that it was taking extra measures to restrict access to all of its systems and consumer data and has been doing heavy monitoring of consumer accounts.

LivingSocial also underscored that credit card information of its users has not been hacked. “We store credit card data through a financial processing network, so the full number literally does not exist anywhere in our system,” the spokesman said.

Still, the hack is a huge blow for LivingSocial, which is owned in part by Amazon, impacting 50 million customers, who will now be required to reset their passwords. All of LivingSocial’s countries across the world appear to have been affected, except in Thailand, Korea, Indonesia and the Philippines, as LivingSocial units Ticketmonster and Ensogo there were on separate systems.

This is the latest big data breach in the consumer Internet space, which has seen troublesome incursions into some high-profile companies recently, including Zappos, LinkedIn and Evernote.

The attack comes at a tough time for the company, since it has been trying to turn itself around after a downturn across the daily deals landspace. LivingSocial got a large cash infusion recently from investors to help stanch its losses. Amazon owns 29 percent of the company.

LivingSocial, the daily deals site owned in part by Amazon, has suffered a massive cyber attack on its computer systems, which an email from CEO Tim O’Shaughnessy — just sent to employees and obtained by AllThingsD.com — said resulted in “unauthorized access to some customer data from our servers.”

The hack includes customer names, emails, birthdates and encrypted passwords.

The breach has impacted 50 million customers of the Washington, D.C.-based company, who will now be required to reset their passwords. All of LivingSocial’s countries across the world appear to have been affected, except in Thailand, Korea, Indonesia and the Philippines, as LivingSocial units Ticketmonster and Ensogo there were on separate systems.

One positive note in a not-so-positive situation: The email sent to employees and customers noted that neither customer credit card nor merchant financial information was accessed in the cyber attack.

This is the latest big data breach in the consumer Internet space, which has seen troublesome incursions into some high-profile companies recently, including Zappos, LinkedIn and Evernote.

When asked for comment on the email, a LivingSocial PR spokesman confirmed the attack and that 50 million customers were impacted.

The attack comes at a tough time for the company, since it has been trying to turn itself around after a downturn across the daily deals landspace. LivingSocial got a large cash infusion recently from investors to help staunch its losses. Amazon owns 29 percent of the company.

More to come, but here’s the email sent to employees, including one that will be sent to customers soon:

Re: Security Incident

LivingSocialites –

This e-mail is important, so please read it to the end.

We recently experienced a cyber-attack on our computer systems that resulted in unauthorized access to some customer data from our servers. We are actively working with law enforcement to investigate this issue.

The information accessed includes names, email addresses, date of birth for some users, and encrypted passwords — technically ‘hashed’ and ‘salted’ passwords. We never store passwords in plain text.

Two things you should know:

1. * The database that stores customer credit card information was not affected or accessed.

2. * The database that stores merchants’ financial and banking information was not affected or accessed.

The security of our customer and merchant information is our priority. We always strive to ensure the security of our customer information, and we are redoubling efforts to prevent any issues in the future.

To ensure our customers and merchants are fully informed and protected, we are notifying those who may have been impacted via email explaining what happened, expiring their passwords, and requesting that they create new passwords. A copy of the note is included below this email.

If you have any questions or concerns, please visit Pulse –https://pulse.livingsocial.com/intranet/Home/more_updates.html — for a list of frequently asked questions. If you have additional questions that aren’t answered in the FAQs, please submit them via email to XXX@livingsocial.com.

Because we anticipate a high call volume and may not be able to answer or return all calls in a responsible fashion, we are likely to temporarily suspend consumer phone-based servicing. We will be devoting all available resources to our web-based servicing.

I apologize for the formality of this note, which the circumstances demand. We need to do the right thing for our customers who place their trust in us, and that is why we’re taking the steps described and going above and beyond what’s required. We’ll all need to work incredibly hard over the coming days and weeks to validate that faith and trust.

– Tim

Subject: An important update on your LivingSocial.com account

LivingSocial recently experienced a cyber-attack on our computer systems that resulted in unauthorized access to some customer data from our servers. We are actively working with law enforcement to investigate this issue.

The information accessed includes names, email addresses, date of birth for some users, and encrypted passwords — technically ‘hashed’ and ‘salted’ passwords. We never store passwords in plain text.

The database that stores customer credit card information was not affected or accessed.

Although your LivingSocial password would be difficult to decode, we want to take every precaution to ensure that your account is secure, so we are expiring your old password and requesting that you create a new one.

For your security, please create a new password for your *email_address* account by following the instructions below.

1. Visit LivingSocial.com

2. Click on the “Create a New Password” button (top right corner of the homepage)

3. Follow the steps to finish

We also encourage you, for your own personal data security, to consider changing password(s) on any other sites on which you use the same or similar password(s).

The security of your information is our priority. We always strive to ensure the security of our customer information, and we are redoubling efforts to prevent any issues in the future.

Please note that LivingSocial will never ask you directly for personal or account information in an email. We will always direct you to the LivingSocial website — and require you to login — before making any changes to your account. Please disregard any emails claiming to be from LivingSocial that request such information or direct you to a different website that asks for such information.

If you have additional questions about this process, the “Create a New Password” button on LivingSocial.com will direct you to a page that has instructions on creating a new password and answers to frequently asked questions.

We are sorry this incident occurred, and we look forward to continuing to introduce you to new and exciting things to do in your community.

Tim O’Shaughnessy

CEO, LivingSocial

“I would not expect there to be any business model changes,” Mr. Child said during an appearance at a Deutsche Bank conference, adding Groupon’s board of directors is firmly in favor of “the stuff we’ve been working on.”

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Chief Executive Tim O’Shaughnessy announced the investment in a memo to employees Wednesday. “This new investment round will allow us to dedicate the resources we need, while also building a significant cash reserve against unanticipated events or bumps in the road,” he said in the memo.

Read the rest of this post on the original site »

Together, the two will be rebranded as nCrowd, and will be headquartered out of Atlanta. 

There are two remarkable aspects to this transaction, even though nCrowd will still only be a fraction of the size of Groupon or LivingSocial.

First is that the two companies represent a total of 19 acquisitions combined, representing a significant percentage of the overall number of deals that have taken place in the U.S. Second is that this deal was able to get done at all, given the current state of the industry.

Over the past year, Groupon has become a clear winner in the space, despite thousands of startups trying to challenge it. Groupon’s staying power, in part, proves that while the coupon business was easy to replicate, it isn’t easy to scale. And even at Groupon’s scale, it still struggles.

Thus, finding a buyer has become increasingly difficult for those that remain in business.

For instance, in 2011, 63 daily deal companies were acquired, but last year, that number dropped to 28, according to 451 Research, which tracks mergers and acquisitions in the space. So far this year, only one deal has closed (that was for Totsy buying the assets of Mamasource).

The last notable deal was when Chase Bank purchased San Francisco-based Bloomspot for $35 million in December.

Even with the acquisition of CrowdSavings by Half Off Depot, the combined entity will still have a minuscule footprint. All told, nCrowd will have two million registered users who are signed up to receive daily emails in 17 markets. The company employs 70 people, who serve locations that are mostly in the South and Midwest, including Atlanta, Tampa, Jacksonville and Kansas City.

Half Off Depot bought CrowdSavings for about 6.5 million shares and about $1.5 million in cash, according to sources familiar with the transaction.

“We compete with Groupon, but we used to compete with 600 daily deals sites. There aren’t that many left anymore compared to how it used to be,” said Brian Conley, CEO of nCrowd (previously of Half Off Depot).

Conley said the four-year-old company has been able to stay afloat by expanding beyond daily deals to social commerce, which means assisting merchants with running Facebook contests and helping them to improve customer retention.

I first talked to Chad Jaquays, CEO of Crowdsavings.com, a year and a half ago, when his company was considered the most active acquirer in the daily deals space — in fact, it was so acquisitive that he built a page on the company’s website announcing, “We Buy Deal Sites.”

Many of the deals were tiny, costing Jaquays roughly $100,000 to $400,000 apiece. He was interested in acquiring more subscribers, but he also took other factors into consideration, like how many of those subscribers had purchased a deal before. In all, he purchased 15 companies, and now he’s found someone interested in buying his own.

The next logical question is, what’s the end goal? Will nCrowd ever get to Groupon’s scale?

Conley isn’t disillusioned.

“Who knows what the future holds,” he said. “I will make no prognostications as to whether we can beat the fastest-growing company ever. But we do feel like we have a unique value proposition for the merchants. Once it is well-understood, this thing could take off.”

But Flurry, a mobile analytics company, is introducing the term “app & mortar” in a new report published today that explores the rise in smartphone shopping.

Clearly, the term is a play on the term “bricks and clicks,” which emerged in the late ’90s and became popular as e-commerce started to challenge physical retailers.

In some respects, this report confirms what we already knew about mobile commerce, but takes it a step further by figuring out who is benefiting the most right now from the trend. Surprisingly, it’s physical retailers.

In the report, Flurry analyzed the amount of time spent by consumers across more than 1,800 iOS and Android shopping apps in December 2012, compared to the same month a year earlier.

The biggest growth category by far was apps developed by retailers, such as Walmart, Macy’s and Gap.

Flurry said time spent in retail apps skyrocketed by 525 percent year over year. In contrast, online marketplaces, such as eBay and Amazon, increased by only 178 percent.

In terms of the share of shoppers’ time being spent inside the different apps, retailers also saw the biggest gains. In December 2012, shoppers spent 27 percent of their time inside of retail apps, up by 12 percentage points over the same month a year earlier.

The gain in share by retail apps came at the expense of online marketplace and daily deal apps, which declined year over year. The share of time being spent with online marketplaces decreased from 25 percent in December 2011 to 20 percent in December 2012. Daily deal providers, like Groupon and LivingSocial, fell to 13 percent from 20 percent.

Flurry did not offer a lot of analysis as to why this was occurring, but suggested that retailers were beginning to better respond to the move toward “online meeting offline shopping through mobile apps.” In general, 2012 was the first year that many online or physical retailers took mobile shopping seriously, so it was likely that the distribution of time spent would change with a huge surge in consumer interest and better options.

Interestingly, even though Flurry noted a decrease in time spent in online marketplace apps, eBay still easily beat its mobile revenue forecast (so it’s not clear if there’s a direct correlation between time spent and dollars spent). Last week, eBay said it recorded $13 billion in mobile revenue in 2012, exceeding its forecast of $10 billion. This year, the online retailer expects mobile revenue to hit $20 billion.

EBay is the most transparent of the larger e-commerce players when it comes to mobile’s contribution.

In contrast, an analyst’s best guess for Amazon is that about $3 billion to $5 billion of its annual sales are coming from mobile devices.

The acquisition was reported by several media outlets, including The Wall Street Journal, which cited sources close to the transaction as saying that Chase paid $35 million for the San Francisco company.

Bloomspot’s roughly 100 employees are expected to be offered jobs at the lender and payment processor.

Together, the two should be a good fit.

In general, banks and card issuers are looking for new revenue streams after the Durbin Amendment capped the amount that they could charge merchants on debit card transactions. Additionally, many banks have already begun sending targeted ads or deals to consumers based on their spending habits.

In a recent story, I named financial companies, including Visa, MasterCard and American Express, as potential acquirers for Groupon. However, one impediment with Groupon is its price. Even though its stock is down around 80 percent since its IPO, it would still cost billions to acquire.

The purchase today by Chase shows that there is an interest, just at a lower price point.

In a release, Jeff Kinder, president of Chase Offers, said, “Merchant partners are continually looking for ways to engage the right customers, and consumers have shown a clear interest in receiving offers from their favorite merchants. We believe Chase has a unique set of assets to bring these customers together and deliver highly targeted, relevant merchant offers at scale.”

Over the past few years, Bloomspot, which was led by former Yahoo executive Jasper Malcolmson, has tried hard to disassociate itself from both Groupon and LivingSocial. Even though on the surface it seems as though Bloomspot distributed similar offers, Malcolmson said he was focused on bringing merchants profitable customers rather than just getting new people in the door.

The company’s motto was, “Great Offers. Great Customers.”

But this deal may not have been so great for investors.

Last summer, Bloomspot raised $35 million in a second round of funding just before Groupon’s public offering. Prior to that, it raised nearly $11 million, for a total of about $46 million. Investors include InterWest Partners, Columbia Capital, Menlo Ventures and True Ventures, among others.

Wall Street is certainly enthusiastic for such an outcome — even grabbing onto a specious rumor that perhaps Google was sniffing around the troubled Chicago-based social discount deals company, which is currently valued at just over $3 billion. On Friday, Groupon’s stock jumped 23 percent on takeover speculation after Tom Forte of Telsey Advisory Group was quoted as saying: “Where the stock is currently trading, it’s a takeout candidate.”

Actually, the stock has been trading at these levels for a very long time, so the sudden attention is decidedly overwrought. More to the point, sources close to Google — which had offered $6 billion for the company before it went public — said that Google has not been contemplating a second foray into acquiring Groupon.

The same is true for eBay, said sources, and Amazon is an unlikely buyer because it already owns a stake in LivingSocial, the second-largest daily deals provider. Additionally, there are lots of other problems that any purchaser would face in buying the company, which sells everything from bikini waxes to GPS devices at a discount.

In an onstage appearance this morning, CEO Andrew Mason declined to address the thinly sourced rumors of a takeover. “What I have said about Groupon is everything I will say about it,” he said. “I am focused on looking forward.”

Given the non-answer, it’s still prudent to ask, is there actually a buyer for Groupon?

First, let’s address the price. Two years ago, Google offered to purchase Groupon for $6 billion. A year later, it went public at $10 billion, and today, it is trading for $2.9 billion. The company has $1.2 billion in cash, and owes merchants about half of that, or around $573 million.

That said, it is still a relatively low price for a company that includes a customer base of 40 million people who bought something in the past year, a hodgepodge of local retailers and merchants that consider Groupon their online marketing channel, and — perhaps most importantly — a better-than-expected mobile business that now represents a third of its transactions.

But, while it costs much less than it once did, that doesn’t necessarily make Groupon a steal.

That’s because over the past year, the Chicago company has stumbled operationally. Europe is underperforming, the company’s main coupon business is slowing as the novelty of the business is wearing off and it has started investing heavily in selling products, a low-margin business that requires tons of logistics to package and ship items to people’s front doors. On top of that, the board recently discussed replacing Mason, who some directors fear may not be the right choice to continue leading the company. While they ultimately decided to keep him, it was a perceptual blow.

At least one big investor is betting something will happen: Tiger Global Management, which recently bought up close to 10 percent of Groupon. The well-regarded hedge fund and private equity firm may be betting it can’t get worse, and perhaps would even push for a sale.

In any case, here’s a look at some of the scenarios:

Google

When Google made the offer two years ago, the search engine was interested in entering the daily deals business as a way to gain a foothold into all things local, including commerce. Since Groupon rejected that $6 billion acquisition, Google has spent the past two years building Google Offers.

While Google Offers still has a very small piece of the market, it has been pivoting toward an integrated ads model, which is less complementary to Groupon’s approach. Google believes that merchants will pay Google only after a purchase has been made, and the sum will be determined by the consumer. The cost per acquisition model is very different from Groupon, which has the consumer paying up front for a heavily discounted coupon.

As one source with knowledge of the situation said: “The timing would be a bit wacky.”

That said, Nikesh Arora, Google’s SVP and chief business officer, had been a very strong advocate of the original deal and might still want more heft in Google’s corner in the competitive local scene. One major plus is that Groupon could also help build a local salesforce to push Google+ Local, which includes Zagat, the online reviews site that competes against Yelp. Groupon might also support its Google Wallet business, which has largely failed to gain traction among consumers.

Another source familiar with the two companies said running a daily deals business is “operationally intensive, and it’s a muscle that Google doesn’t have, so from a synergy standpoint it would be complementary.” But, “if they are still serious about local, is that the business model for local that they want to pursue?”

eBay

For the past two years, the e-commerce company has aggressively been going after the local commerce market by helping transactions occur online or at a nearby store. Additionally, its PayPal division is moving fast into the physical payments space. Strong merchant relationships, like the ones Groupon has, could go a long way toward making those things happen faster.

EBay recently raised $3 billion in debt financing and has $7.3 billion cash on its balance street. Its stock price also has gone up more than 65 percent in the past year, giving it plenty of fire power to make a big move.

It also has the stomach for acquisitions. However, many of its purchases over the past two years have been about buying technology and talent. It bought RedLaser, the barcode scanning technology for $10 million; Milo.com, a local inventory company, for $75 million; and Zong, a mobile payments company, for $240 million. Over the years, it has also made substantial purchases, including GSI last year for $2.4 billion, Bill Me Later for $1.2 billion and Skype for $2.6 billion.

A few months back, the company entered the daily deals business with the launch of eBay Lifestyle Deals, which runs daily deals in a number of markets, including San Francisco, Seattle, Los Angeles and Washington, D.C. To do so, eBay teamed up with Signpost, which arranges the deals with local merchants. Interestingly, Signpost is backed by Google Ventures, and already provides deals for Google Offers.

The company is also experimenting with eBay Now, a service that allows consumers to buy something on their phone and have it delivered within an hour. “They continue to be interested in local, and they have this experiment going on right now with eBay Now, but they are still iterating and figuring out the local angle,” one source said.

Likewise, PayPal’s local strategy is under development. It is trying to roll out physical payments to big-box retailers like Home Depot while also offering a credit card reader for smaller retailers called PayPal Here.

The biggest argument against this deal is that eBay may not need Groupon, and that it already has the infrastructure to roll out deals through partnerships — which would cost a whole lot less and be a lot less painful.

Amazon

Simply put, Amazon already has its own troubles with its significant stake in LivingSocial, which just slashed 400 jobs. In the third quarter, Amazon took an impairment charge of $169 million, or 37 cents a share, related to its stake in LivingSocial, resulting in the company reporting an overall third-quarter net loss of $274 million, or 60 cents a share.

Any potential Amazon-Groupon tie-up would then be a merger between LivingSocial and Groupon, creating perhaps an even bigger black hole that would also result in a lot of ongoing integration problems. While together LivingSocial and Groupon would easily make Amazon the largest daily deals company and up its local commerce efforts, it’s still not clear if the online retail giant wants to double down here.

Separately, Amazon has entered the daily deals business on its own with a service called Amazon Local that competes directly with LivingSocial and Groupon. The offers became particularly interesting to the company after it started using them to discount the price of its Kindle e-readers and tablets. If owners don’t want to see the offers, the tablets can cost up to $40 more.

The company has said that it essentially doesn’t need help building the business – it thinks it can get to scale fast in the space because it already has 164 million active customer accounts worldwide (which are defined as people who have made a purchase in the past year).

Perhaps most importantly, though, Amazon has a history of building, not buying.

Visa, MasterCard, American Express

These three payment companies have huge market values, and should not be discounted as players in the local commerce space. In addition, a year ago, all of them started looking for new revenue streams after the Durbin Amendment capped the amount that banks and card networks charge merchants on debit card transactions.

Already, many banks are sending targeted ads or deals to consumers based on their spending habits. However, it’s unclear whether they need to be the actual deal makers, or just act as a distribution system for advertisements and coupons. For example, MasterCard recently partnered with Gilt City, the daily deals division of Gilt Groupe. Through the partnership, MasterCard will be able to offer its users deals for restaurants, concert tickets and travel, and at the same time, help Gilt City get in front of some of the card issuer’s millions of users.

MasterCard may be the frontrunner of the three as a potential suitor. Not only has it shown direct interest in the space, American Express is still absorbing its acquisition of Revolution Money, for which it paid $300 million cash in 2010, and Visa has been active with its purchase of CyberSource for $2 billion in 2010. More recently, it made an investment in Square, the hot mobile payments company.

Other Suspects

A number of other companies could be put on a Groupon acquisition list, such as Yahoo, Microsoft and Facebook.

Microsoft and Yahoo both have the money, but have not done much in the space so far. An acquisition would allow them to catch up quickly, but would be expensive and largely not complementary with what they are doing already — which is almost nothing. Facebook, in particular, tried once to enter the space and failed and might be focused on other lower-hanging revenue sources.

Groupon could also look to private equity firms for a buyout, which would allow it to have some space while it fixed some of its issues.

Internationally, there is Japan’s Rakuten, which owns Buy.com in the U.S., and China’s e-commerce giant Alibaba, which has been looking at ways to enter the U.S. market.

Of course, Groupon might simply keep stumbling forward and hope it can turn itself around. But, at some point, without improved revenue and cohesion at the top levels, something is sure to bring pressure to its options. 

In fact, in afternoon trading today, the rumors continued to keep the stock elevated. Shares closed 3.76 percent higher today at $4.41 a share.

Today at a local mobile conference in San Francisco, Groupon CEO and co-founder Andrew Mason appeared for another onstage interview and was immediately asked about the various and sundry mishegas of late at the daily deals site.

And said, um, not much. It wasn’t exactly his fault — there is almost no plus to him saying much.

So Mason did not.

Not much about thinly sourced rumors of acquisition interest by Google.

Not much about the palpable tension and discussions between him and some board members about whether he should remain as Groupon’s top leader.

Not much about its lackluster stock, down more than 80 percent since its IPO just over a year ago.

Not much about its issues in Europe or about its growth prospects.

“What I have said about Groupon is everything I will say about it,” he said. “I am focused on looking forward.”

Bokay!

Actually, Mason, who is a very clever man, joked effectively, “Let’s not talk about mobile,” which was the actual focus of the Mobile-Loco conference he was appearing at.

Fair point, and he moved into explaining what Groupon was up to these days (more of the same, but more with the mobile).

About one-third of the Chicago-based company’s business is now done via mobile, by the way.

“Our mobile customers have been our best customers,” he noted, making the point that smartphones appeal to a more cutting edge consumer and also merchants.

“I think they are willing to use technology when the value proposition is clear to them,” Mason said about retailers, one of whom he worked at recently. “They do it because it is important to them.”

Mason also talked about local, payments and other generalities about the social daily deals business.

All of which he answered with a level of nice confidence that belies troubles that the novice CEO is trying to overcome. It’s a tough task for anyone, of course, and not one that many would be able to handle with as much equanimity as Mason does in public. So, on one level, you have to hand it to Mason for putting himself out there so much at a difficult time and chatting away.

But not about what the audience wanted to hear about. Which is to say: What’s really next?

While I have already spelled out a number of reasons why he might be let go, here’s one reason why he should stay: On Black Friday, Groupon said it saw almost twice the purchase rate of its previous busiest day on record.

Call it an early present for Mason, who also learned yesterday that he is keeping his job as CEO — at least, for now.

This year, Groupon is putting an especially heavy emphasis on holiday gifts, after launching physical goods on the site more than a year ago. While coupons for restaurants and spas also sell well this time of year, physical gifts are more traditionally considered presents.

Yesterday, Groupon said its physical products division, Groupon Goods, celebrated its biggest four-day weekend since the program’s inception. Put another way, over the seven days after Thanksgiving in North America, Groupon generated double the gross billings from last year, with essentially all of the growth attributable to Groupon Goods, according to Yipit, a third-party data provider.

Top sellers included customizable photo books, iPhone cases, Topaz earrings and flying toy helicopters, which sold 43,000, 40,000, 42,000 and 11,000 units, respectively.

While an increase in sales is always a good thing, Groupon has received some static about its entrance into selling physical goods, which have thinner margins than local deals. It also means entering an extremely competitive landscape with well-established players, like Walmart and Amazon, although clearly it has demonstrated it can sell thousands of items fairly easily.

At least two promotions helped Groupon see a huge spike in the sale of Goods over the weekend. Yipit said that following Thanksgiving, the homepage redirected visitors to Groupon.com/goods (although it’s back to directing people to their local markets). Additionally, Groupon rolled out Grouponicus, the company’s third annual wintertime promotion, which offers customers gift ideas. For the first time this year, it offered a holiday toy catalog and free shipping and returns.

Groupon’s close competitor LivingSocial, which is facing its own turmoil, also saw a lift this year during the Thanksgiving week, although not as much since it’s still in the early days of building out its products division. In North America, for the week following Thanksgiving, Yipit said LivingSocial revenues jumped 30 percent. In particular, Yipit said sales from products were up roughly 5 percent, with a bump over the past few days coming from a partnership with Fab.com. (Separately, Fab said today it averaged $933,500 in daily sales for a week straight).

Still, one thing on Mason’s wish list that he has not received is a higher stock price. While shares were trading higher recently on news that he might be replaced, shares are now down 8.8 percent, or 40 cents, to trade at $4.14 a share.

A spokesman confirmed that employees received the news this morning. Of the 4,500 people on staff, 400 were handed pink slips. Less than half of the layoffs occurred in the company’s Washington, D.C., headquarters, with a couple dozen taking place in its international offices. As Bloomberg previously reported, Eric Eichmann, the company’s president of its international business unit, is also leaving the company.

The layoffs in D.C. were mostly related to customer service, editorial and administrative functions. Many of the customer service jobs will be relocated to Tucson, Az., where the company opened a call center this summer. Additionally, some employees who were located in some of its smaller markets in the U.S. were let go, but none of the company’s regional offices in Seattle or San Francisco were closed.

Unlike Groupon, LivingSocial is a privately held company, so it’s not always clear how it is doing, but since Amazon owns a large stake in the company, some of its financials are disclosed on a quarterly basis. As evidenced by Amazon’s third-quarter earnings in October, it appeared that LivingSocial was in a real slump.

Amazon reported a quarterly net loss of $274 million, or 60 cents a share, including an impairment charge totaling $169 million, or 37 cents a share. In Q3, LivingSocial reported a $565 million operating loss on revenue of $124 million, and revealed operating expenses of $193 million. In a memo obtained by AllThingsD, CEO Tim O’Shaughnessy explained that most of the losses in the quarter involve non-cash items related to acquisitions made last year that are no longer worth as much. What’s more, for the first time since 2009, LivingSocial had positive operating cash flow.

Still, based on the company’s revenue and operating expenses alone, there appears to be a gap of almost $70 million a quarter that the company will have to account for eventually, either through growing revenue or cutting expenses.

The LivingSocial spokesman said that the decision to make the cuts today was part of a global review of the business; the company is looking to come up with a way to free up resources to make investments in marketing and mobile, while also aligning the cost structure with where the business is today. LivingSocial is also cutting back a new takeout and delivery feature that was launched in 20 markets. One area it is not eliminating is its adventures and events business, which organizes one-off events in cities around the country, ranging from river-rafting trips to wreath-making classes.

The layoffs come as LivingSocial’s biggest competitor faces its own issues. Groupon is struggling to continue its rapid growth, and has watched its stock price tumble 80 percent since going public a year ago. Today, Groupon’s CEO Andrew Mason is meeting with the company’s board to determine whether a more seasoned executive is what is needed to run the company going forward.

Kara Swisher reported yesterday that several Groupon board members have been considering replacing Mason with a new CEO.

Today, in an appearance at Business Insider’s Ignition conference, Mason admitted to the audience that his performance was under review.

“The stock is down 80 percent since the IPO a year ago, so it would be weird if they weren’t discussing if I was the right guy,” he said. “That’s their chief responsibility, and they have discussed it in the past.”

At a regularly scheduled meeting tomorrow, the company’s directors, who do have that fiduciary responsibility to Groupon’s shareholders, will be asking the tough question as to whether Mason should continue running the daily deals company, or if it makes sense to bring on someone more experienced.

If it were up to Mason, he’d stay: “If I ever thought I wasn’t the right guy, I’d be the first one to fire myself.”

While at the helm over the past four years, the co-founder has accomplished some pretty awesome milestones — Groupon became the fastest-growing company ever, and had the largest IPO since Google went public. In that time, the thirtysomething Mason has transformed from the office comedian and prankster with uncombed locks to someone who more gracefully conducts himself on conference calls and wears suits to public appearances. While onstage today, he said that the CEO needs to be someone who can attract a strong team, choose a winning strategy and then execute against that strategy.

“I’m flattered that people think that removing me would flatten these bumps,” he added.

Still, as many companies and boards realize, it takes a different skill set to grow a company than it does to run one at enormous scale, and whether the founder is the right fit to guide an organization through its next phase is not always clear. Does Groupon need an Eric Schmidt, the former Google CEO, who can be brought in to work closely with the company’s founders, or is Mason a visionary, like Mark Zuckerberg, who can remain successful if surrounded by a few heavy-duty lieutenants?

There is no denying that, over the past year, there have been some major management missteps, which Mason will ultimately have to take responsibility for as the chief executive.

Here are five of them that the board will likely be looking at tomorrow as part of its evaluation as to whether Mason should stay or go:

1. Accounting: Never Groupon’s strong suit; the daily deals company has struggled with its books since before it went public. Prior to its IPO, it was forced to restate revenue and also had to dump a controversial accounting metric that made the company look more profitable than it was. After it went public, the problems continued. Following its first quarterly report, Groupon had to restate its earnings to take into account higher-than-expected returns last year during the holidays.
2. Management turmoil: Earlier this month, the company finally appointed a COO after the seat sat vacant for more than a year. The company picked Kal Raman, who was promoted from SVP of global sales and operations, a job he was essentially doing anyway. This is the third attempt at having an operations guru, after burning through two others in 2011. Neither Margo Georgiadis, who came from Google, or Rob Solomon, who came from Yahoo, lasted long.
3. Maintaining margins: This one is a big deal. Groupon was deemed the fast-growing company because of its tremendous top-line growth, but the real reason the company was considered so valuable was because of its high margins. Local restaurants and merchants were willing to pay big dollars to get new customers in the door. But as sales have started to plateau, the company has started to augment its original business with the sale of physical goods, which has inherently thinner margins. The business is also entering extremely competitive waters where well-established players like Walmart and Amazon operate.
4. European troubles: Part of the company’s promise when it went public was world domination. Groupon was on track to become a household name across the globe by replicating its popular U.S. business model everywhere. But Europe has underperformed. Mason has admitted that Groupon was too focused on capturing market share in those markets and subsequently let innovation and customer and merchant satisfaction slide. As a result, Groupon’s gross bookings revenue have been severely affected.
5. Continued growth: All of the previous issues are well known, but the big challenge going forward will be for Groupon to keep evolving and finding ways for both merchants and customers to continue coming back. Groupon has identified a two-part approach. One includes the sale of Groupon Goods. The other bet is to build more tools and services to make local merchants happy. So far, those tools have included online scheduling software, mobile payments and point-of-sale hardware. As designed, these services are not expected to generate huge amounts of revenue, but rather to continue merchant interest in buying daily deals.

It is a clearly troubled record, and a tough road for a novice CEO to handle. But perhaps the most damning sign is the stock price. While it has risen recently, after Tiger Global Management bought a big stake — and went up almost 5 percent since news of Mason’s possible ouster was reported here yesterday — shares are still off more than 84 percent since Groupon’s IPO a year ago.

In other words, for Mason, it’s a long way down.

According to sources close to the situation, several Groupon board members have been seriously discussing making major leadership changes at the Chicago-based daily deals company, including bringing in a more experienced CEO to take over for co-founder Andrew Mason.

The board of Groupon has a regularly scheduled meeting later this week; sources said such management issues are likely to be discussed there, due to increasing frustration by some directors about the novice CEO’s performance so far.

To be clear, a move to replace Mason is not likely to happen immediately, if at all. And, in any case, any changes are likely to be done with his involvement. In addition, Mason also has support on the eight-member board — director and former AOL exec Ted Leonsis has always been a key mentor to him, for example.

But it has become obvious over the last months that a substantive rift has been developing between Groupon’s key players.

That has centered on Mason’s co-founder and Groupon executive chairman, Eric Lefkofsky, and board member and co-founder Brad Keywell. They, as well as several other directors, have been urging Mason to be more aggressive and public about the company’s turnaround efforts, sources said.

“The question is not whether Andrew is a good guy, but whether Groupon needs an Eric Schmidt,” said one person close to the situation, referring to the former Google CEO who was brought in to work closely with the company’s two founders. “And there’s been a lot more pressure now on the board to consider this seriously.”

The thoughtful and affable Mason — who has been the heart and soul of Groupon’s quirky culture and innovative product strategy — has indeed sometimes seemed to be in over his head in terms of leadership once the stakes got higher and the pressure increased after its IPO was announced last June.

While the company’s struggles have been well known for a while now, discussions about Mason’s tenure as CEO have increased as its stock has dropped precipitously. That has prompted its directors and management to seek to find a way to get the company on more stable footing as a business and, perhaps more importantly, with investors.

That has included the promotion of former Amazon exec Kal Raman to COO recently to give Mason more support. Raman is now, in effect, in charge of many operational aspects of the company, although not product, marketing or technology.

Another bright light recently has been a major investment by Tiger Global Management, a well-regarded hedge fund and private equity firm, which bought up close to 10 percent of Groupon. The move sent its shares up 24 percent in the last week, to $3.88, with a $2.5 billion valuation.

But that’s still 85 percent below its public offering price a year ago, and a far cry from the hype around the company when it exploded on the scene several years ago. Once the darling of the start-up space, with its innovative new social e-commerce model and lightning-fast growth, Groupon attracted huge funding from a panoply of top-tier Silicon Valley investors.

With that came a stunning $6 billion acquisition offer from Google and, later, an even huger valuation of more than $10 billion.

All that goodwill changed immediately after the company announced its IPO last June, with continued controversy around everything from Groupon’s accounting to management turmoil to its business model to rocky relations with merchants.

And while Mason has labored to affect a more professional tone in his own style, and seemed to have created a more stable management team, continued issues in Europe and getting enough traction for a number of new promising product initiatives has been tougher to solve.

Therefore, Mason’s performance is naturally under increased scrutiny, said sources. He will surely get questions on his record tomorrow, when he is scheduled to appear onstage at Business Insider’s Ignition conference in New York.

Charles Sipkins, a spokesman for the board, declined to comment, as did Groupon spokesman Paul Taaffe.

In an interview today, Jeff Holden, the company’s SVP of Product, explained that Groupon has mastered serendipity, but it has not always been good at giving people a place to shop for things they are already looking to buy.

“Groupon was the ultimate place where people would buy things that they didn’t know they were going to buy when they woke in the morning,” he said. “Our model was about talking to merchants, agreeing on a deal, then running the deal. Then it would disappear and be gone.”

Today, in New York and Chicago, consumers will start seeing a new homepage, where offers will be browsable and searchable — and won’t disappear. Instead, there will be a catalog of offers spanning categories such as food, spas, health, fitness, home and auto. So far, Groupon has amassed 27,000 deals in North America as part of the new direction for the company.

While this launch may seem like a relatively small move, it is just one aspect of the business that the company must nail if it wants to continue growing its traditional daily deals business. If Groupon is extremely successful in this endeavor, these deals will start appearing in search results on Google or Bing, much like a Yelp page or other local listings site. That does not happen today because of the temporary nature of Groupon’s current deals.

The evolution started about 18 months ago with the creation of Groupon Now, which got merchants to offer deals that could be used immediately. However, with the move being announced today, the Groupon Now category will go away. At first, consumers may not notice a drastic difference because they will continue getting emails, but when they visit the site, there will be a new layout. In the first image below, you’ll notice the new search bar and location field.

New Groupon homepage

When searching for “car,” more than a dozen offers are returned for auto detailing, car washes and repairs.

In the old format, which still exists for most cities in the U.S., there was no search bar, and when a consumer clicked on “all deals,” they would only surface a few options — not the entire database. Holden said merchants have not been nervous about adopting this format, even though it seems like surfacing the same deals every day would eventually hurt a merchant’s brand. “They’d much rather have a unit sold through Groupon than a seat go empty,” he said. “It makes perfect economic sense. The vast majority have participated immediately, and we aren’t hearing concerns from merchants over that.” He said merchants will also have the option of capping how many times a consumer can redeem a particular offer.

So far, Holden says, the new format is performing well. “We are seeing a significant lift from people who experience the ‘pull’ experience,” he said. “It will take time for people to discover it and for it to ramp up, but the immediate embracing of this shows that people were hungry for capability.”

For comparison, here’s a look at the Seattle homepage, which still has the old format:

Old Groupon Homepage

This represents the second promotion for the executive since joining in April, so clearly, after what was essentially a very long job interview, Groupon is confident that the third time will be the charm.

Prior to his C-level appointment, Raman was the SVP of Global Sales and Operations. In his new role, he’ll continue reporting to CEO Andrew Mason and oversee, well, the company’s global sales and operations. (Basically, it’s just a title change, since that’s what what he was doing anyway.)

“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,” Mason said. “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.”

In an interview about his initial appointment, Raman was direct about what Groupon needed: Experience. He laughed off the characterization that he was adult supervision for the Chicago company, which is what many critics believed it needed at the time. Over his lengthy career, the 43-year-old has held roles at Amazon and was the CEO at Drugstore.com. But since he joined Groupon, things have gotten dicier for the daily deals company, which is seeing its core business erode in favor of a lower-margin e-commerce business. Groupon stock today closed at $2.73 a share, just off its all-time low of $2.60 a share.

Raman won’t be looking to duplicate the performance of Groupon’s past COOs. In April 2011, Groupon hired Google’s VP of Global Sales Margo Georgiadis to be COO, but she decided to return to Google after just a few months on the job. A pattern that was repeated after Georgiadis replaced Rob Solomon, who was only in his job for one year.

The latest to enter the space is Bank of America’s Merchant Services, which today is unveiling Mobile Pay on Demand, a service that allows small business owners to accept customer payments over a cellphone.

“I hate to come out with a commodity product, but every bank should have one,” said Trevor Rubel, EVP of Strategy and Emerging Products for Bank of America Merchant Services.

Square is perhaps the most high-profile company in the market and is already processing $8 billion in payments annually. But its head start hasn’t deterred others from entering into the space, including eBay’s PayPal, Groupon, Intuit, Pay Anywhere and many others.

Bank of America’s nearly identical service will be available starting Dec. 3 and will be priced very competitively. The card reader (which is slightly more bulky than Square’s, and is more rectangular) will be free and payments will cost 2.7 percent per swiped transaction. The mobile application, available across both iOS and Android, is also free.

The rate is priced slightly below Square’s offering of 2.75 percent, but is slightly above Groupon’s 1.8 percent plus 15 cents fee (although Groupon also requires merchants to be active daily deal providers). Bank of America charges no monthly or annual fees.

Rubel says he believes that Bank of America has an advantage over the others because it has a very strong, trusted brand. Plus, it already has substantial relationships with retailers, including roughly two million small- to mid-sized businesses that don’t currently use its payment terminals because they don’t process enough transactions to justify it or because they work on the go. He imagines the new service appealing to the usual crowd of taxi cab drivers, participants at farmer’s markets and contractors.

Some of the perks provided by the service include next-day access to funds and customer service representatives available by phone. Additionally, retailers will be the merchant of record, meaning that the name of the business will appear on a consumer’s credit card statement instead of Bank of America’s or some other provider.

For those merchants that sign up by the end of the year, they will also receive a one-year subscription to Bank of America’s deals marketing platform, which normally costs $200. The platform allows business owners to create a Web site, and to distribute Groupon-like offers, coupons or loyalty programs. The offers are syndicated across several sites, including Facebook, Twitter or 8coupons.com. When offers are redeemed, Bank of America will charge merchants small fees, depending on the type of offer.

The Chicago daily deals company, which once focused solely on selling coupons for restaurants and spas, has quickly morphed into an online retailer, selling physical goods that are shipped to your front door. In about a year’s time, the side business has grown to account for 11.4 percent of the company’s North American revenue, totaling $193.7 million in the first nine months of the year.

Yesterday, on Groupon’s quarterly conference call, CEO Andrew Mason defended the decision to expand into products, even though it means lower margins and going up against some mighty competitors, like Amazon.

“We built something that fits squarely into our core customer value proposition of the discovery of curated offers and carves out a unique space in the retail e-commerce sandbox,” said Mason, according to a Seeking Alpha transcript of the call. “We neither need to nor do we want to try to out-Amazon Amazon. We’ll never be about comprehensive product selection, but our skills at curating unbeatable offers are clearly resonating with our customers.”

The public markets did not respond favorably to the company’s enthusiasm.

In after-hours trading yesterday, Groupon’s stock plunged 15 percent, or 59 cents a share, and in the morning the news was still bothering investors. Shares fell nearly 30 percent today, or $1.16, to trade at $2.77 a share, way below the company’s last 52-week low of $3.68 a share.

The company’s market value now totals $1.82 billion, regrettably far below Google’s $6 billion buyout offer.

Groupon Goods offers a handful of products daily, making it similar to Amazon-owned Woot, which offers discounted merchandise for a limited time. Some of the electronics are priced in the hundreds of dollars, but most products fall between $10 and $40, filling a deal-seeker’s sweet spot. For instance, as of today, only 190 refurbished Motorola Xoom tablets had been sold for $229, but more than 1,000 Netgear wireless routers had been sold for $32; and more than 1,000 packs of men’s underwear had sold for $12. In particular, Mason illustrated Groupon’s reach by saying it was able to help Garmin sell nearly 30,000 GPS units in 24 hours.

Add to that free shipping and free returns on any purchases over $15 and the offer appears even better. Groupon will also be opening special “stores” for the holidays, including Thanksgiving- and Christmas-themed events. This will expand consumer interest in Groupon this year, compared to last year, when the company’s holiday focus was on resolution-type offers, like weight loss or gym memberships.

So, will Goods be less profitable than its original deals business, and what can investors expect to happen to the company’s original business?

On the call yesterday, Groupon’s CFO Jason Child addressed the topic of profitability.

He said the two businesses are reported differently, according to standard accounting practices. But if they were to be compared on an apples-to-apples basis, a local deal’s operating margin is roughly 10 percent to 12 percent vs. the Goods business, where he hopes margins will end up in the high-single digit percentages. “It should be actually quite similar,” he reasoned.

Mason addressed how the two businesses will work together. Going forward, he said less of the real estate in the emails Groupon sends out will be dedicated to local offers, which will mean coming up with new ways for customers to find them. Two possibilities, he said, are to focus more on Google and Bing search and discoverability on the mobile phone.

“Goods has been the primary driver of our growth over the last two quarters and is now at an annual billings run rate of nearly $1.5 billion,” Mason said. “This begs the question, what does this mean for our local business? Has it reached the limit? To be clear, we continue to believe in the size of the local e-commerce opportunity in front of us.”

The SEC has completed its review of Groupon’s filings, the agency said in a letter dated Oct. 4 and released Friday by Groupon. The SEC letter said the regulator still can take action later against Groupon.

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Many believe the future of tracking purchases and making payments lies with near field communication technology or smartphone applications, but this Kirkland, Wash.-based company is betting on something much lower tech: Text messaging.

“It’s not only because not everyone has a smartphone, but in a high-volume restaurant, or coffee shop, they don’t want someone fumbling around or holding up the line,” said James Sun, CEO of Pirq. “Text messaging is very fast, and it’s supported by all phones, including feature phones.”

Pirq became well-known this summer after announcing a partnership with Apple to bring an exclusive set of restaurant deals to all of its employees in Silicon Valley. But that was just a side deal to get the start-up some buzz. The company’s core business is in running loyalty programs for any small business. Many others are competing in the space, including Groupon, Belly and FiveStars.

Pirq takes a slightly different approach. For $50 a month, it gives each merchant an Android tablet to place on their counter. From there, consumers can scan a bar code using the Pirq application on their iOS or Android phone, or they can choose to send a text message to the short code displayed on the screen. Because they have a choice, consumers don’t have to take the time to download a new application, or even register — two big hurdles for adoption.

Merchants also have a choice on what to offer loyal customers. They can either reward consumers who hit a certain spending threshold, or they can send consumers a text message to promote a deal during off-peak hours, when business is slow. “There’s a big trend right now,” Sun said. “[Merchants] don’t want to discount the brand to the public. They are private deals for existing customers.”

Merchants pay $50 a month for the service, and from 50 cents to $6 for each reward redeemed. Costs vary depending on the service, ranging from cups of coffee on the low end to spa services on the high end.

The second round of funding was led by Rally Capital, and brings the company’s fundraising total to $3.2 million. The funding will go toward rolling out the company’s new text messaging program. Sun said that the service will be live in 70 stores in Seattle and San Francisco by the end of next week. The company plans to raise a larger round next year to hire sales people to expand nationwide.

On Wednesday, the daily deals giant rolled out Groupon Payments, which will allow merchants to accept credit cards using an iPhone for as little as 1.8 percent plus 15 cents per transaction, a rate Groupon guarantees is the cheapest available.

Immediate investor reaction was positive, pushing the company’s beleaguered stock up 14 percent this week to $5.38 a share, and it managed to hold on to most of that, closing Friday at $5.28.

Groupon hopes the payments feature and its low transaction costs will give merchants another good reason to use its deal services, even if Groupon Payments does not end up generating a lot of additional revenue on a standalone basis.

“We think this will help us sell more Groupons,” said Groupon’s CEO Andrew Mason, in an interview with CNBC. “We are not focused on these businesses boosting the bottom line; they don’t need to be wildly profitable on their own. What we are really focused on is using additional services to strengthen the value proposition that we have for our merchants.”

And that may be a good way to look at it, since many critics believe it is a race to zero as new competitors entering the payments business are forcing prices down.

Here’s Mason’s interview with CNBC:

In an interview, Rosenblum said that today was his first day at Drawbridge after working at Google for four and a half years.

In his new role as Drawbridge’s VP of Product, Rosenblum will be responsible for overseeing the company’s technology, which enables marketers to target users as they move from their computers to tablets and to mobile phones.

“Mobile is gaining share of minutes, so at some point it has to gain share of dollars,” Rosenblum said.

The company is trying to solve a problem, he said, that he was familiar with at Google. Google Offers sells discounts to consumers on everyday items, such as spa services or meals at restaurants, similar to Groupon. However, Google’s offering is slightly different because it is designed to help Google close the loop, so that it can show how online behavior — including Web searches — is dictating offline purchasing behavior. A key component of that is Google’s payment platform, called Google Wallet, which has struggled to gain consumer adoption.

While several members of the Google Wallet team have left, Google Offers has been more stable, even considering Rosenblum’s exit.

Rosenblum says his departure is not a reflection of the division’s success. “We’ve always positioned Google Offers as not competing directly with Groupon. We’ve built it as a closed loop ad platform,” he said. “I think we were wise to take a different tack and spend our engineering resources on that tack. Most small advertisers want to pay on CPA (cost per acquisition) basis, and I’m pretty proud that it’s as far along as it is.”

In May, Rosenblum announced that Google had started to integrate Groupon-like offers into Google Maps and that it was trying out other advertising models for coupons and rewards programs.

Now at Drawbridge, he said, he can help even small companies that don’t have Google-size resources increase revenue from mobile advertising by increasing their targeting abilities. The San Mateo, Calif.-based company is about two years old and has 21 employees. In May, Drawbridge’s founder and former Admob engineer Kamakshi Sivaramakrishnan raised $6.5 million from Sequoia Capital and Kleiner Perkins Caufield & Byer.

Here’s the full release:

Eric Rosenblum, Former Google Director of Product, Joins Cross-Screen Advertising Startup Drawbridge

Mobile payments expert to lead product innovation for Drawbridge’s cross-screen advertising platform

SAN MATEO, Calif. – September 10, 2012 – Drawbridge, the leader in cross-screen mobile advertising, today announces its new VP of Product: Eric Rosenblum, former Google Offers Director of Product. Rosenblum brings over 16 years of experience in product innovation, mobile payments and entrepreneurial ventures and will be responsible for driving forward product development plans for Drawbridge’s cross-screen mobile ad platform.

Rosenblum spent over four years at Google as Director of Strategy and Operations and Director of Product. Prior to joining Google, Rosenblum was founder and CEO of Smartpay, a leading mobile payment company in China. He also served as GM of Greater China and Global Strategy GM for RealNetworks. Rosenblum started his career with the Boston Consulting Group in Hong Kong and Shanghai after receiving an MBA from MIT Sloan.

“Drawbridge’s opportunity is immense,” says Rosenblum. “10% of media time is now consumed on mobile, but mobile only attracts 1% of the ad spend. The team at Drawbridge has made tremendous progress developing the tools to close this gap and building the technology foundations to finally make targeting and attribution work across all mobile screens and devices. I am beyond excited to be joining this outstanding team for the challenge.”

Drawbridge has developed technology that is able to leverage targeting data across screens and across devices. Through Drawbridge’s sophisticated probabilistic and statistical inference models, brands get a unified view of their customers regardless of channel, screen, or device. Since launching in May, Drawbridge has onboarded major advertisers focused on driving cross-screen performance in the retail, travel, and entertainment verticals. Drawbridge has made its innovative platform publicly available to advertisers and publisher partners, who can sign up at www.drawbrid.ge.

Kamakshi Sivaramakrishnan, Drawbridge founder and former AdMob and Google scientist, leads the company with funding from premier venture capitalists Kleiner Perkins Caufield & Byers and Sequoia Capital.

To learn more about Drawbridge or sign up for their service, visit: www.drawbrid.ge

About Drawbridge
Drawbridge developed the world’s first cross-screen ad technology, enabling marketers to reach their target audience across any screen and any device – smartphone, tablet or personal computer. Unlike web cookies or fingerprint-based solutions, Drawbridge leverages anonymous, non-personally identifiable information to serve ads to hundreds of millions of unique users around the world – regardless of what kind of device they happen to be using. Drawbridge is located in Silicon Valley and is backed by Sequoia Capital and Kleiner, Perkins Caulfield and Byers.