With her departure, Groupon has undergone a reorganization as was noted by Andrew Mason, Groupon’s founder. He wrote that the respective heads of sales, channels, international and marketing would report to him directly. He even detailed that there has been an expansion to its senior executive team, as there has been an inclusion of eight employees this year.
Groupon is into a business of offering online coupons, which can be used by businesses as there are offers tied in to how many people decide to take up a particular deal. The revenue generated by the company is from the money it takes as a slice of the sales from deals it advertises.
The revenue revelation would help Google Offers grow to some extent as Groupon had its major strengths in the way it was growing and the revenue it was generating, as the growth rate was high. But as for now, it seems that there was still a noticeable growth rate, but Groupon has not been able to achieved the so-claimed $1 billion mark as of now.
A bigger setback for the company was when it was revealed in a filing on Friday with the U.S. Securities and Exchange Commission that there were a few errors which were committed in presenting its revenue. The company said it was reporting revenue before it paid fees to merchants using Groupon.
According to the filing, this revelation would result in reduction of previously reported revenue and therefore there would be a corresponding reduction in the cost of revenue in those periods. The change details that the company’s revenue for the year 2010 was down to $312.9 million from $713.4 million. This means that its revenue had a drop to less than half of the earlier reported revenue. The change has even affected calendar years 2008 and 2009 revenues. For the current year too, the revenue drop has been from $1.5 billion to $688 million as Groupon restated its revenue.
The COO problem has affected Groupon majorly as Georgiadis is the second COO to exit in six months. Before her, Rob Solomon left after starting in early 2010. Georgiadis moved into the company, shortly after the company had its documents filed for going public in a bid to raise $750 million.
Groupon has had its share of other problems too as in June, Groupon filed papers with the SEC for an initial public offering, but it was delayed. Groupon on its own, even rejected Google’s bid of $6 billion last December.
Georgiadis had held 1.1 million in restricted stock options, which was noted as per a detailing to the SEC. Returning to Google, would in no case match such a huge financial reward. But a few analysts smell fish in the processes as PrivCo analyst Sam Hamadeh said, “A COO leaving with all those shares? There’s no question that this raises questions.” Groupon might have had a number of problems, but this question would make things worse as, the revenue tables have even been pulled down after Georgiadis made her way out of the company.