It can no longer claim to be the fastest-growing business ever,
) at least can brag that it survived the short-lived bubble for
daily deals sites.
It may even have come up with a business plan that makes sense to
It's not making money yet, but it's closer after the last quarter.
It earned $0.02 per share before factoring in the costs of employee
stock options and past acquisitions.
On the surface, the quarterly earnings announced Thursday after the
close weren't that great. Sales rose 4.7% to $595.1 million, and
net loss narrowed to $2.58 million. That fell short of the analyst
compiled by Bloomberg
, for sales of $615.7 million, though the loss was less than the
expected $14.3 million.
Groupon's forecast for the fourth quarter is in line with
expectations. It foresees revenue of $690 million to $740 million,
and operating income of $40 million to $60 million. The analysts'
estimate is $723.7 million in revenue, and profit of $46.1 million.
The initial reaction was negative, with the company's stock
dropping 10% in after-hours trading before reversing direction to
add 1.47%, ending up at $9.64 per share.
The whiplash may have been caused by the upbeat details that
started filtering through on Groupon's latest quarter, and its
intentions going forward.
First, the excuses, excuses for the shortfall in revenue: It's
) fault. The company redesigned its Gmail, tucking promotions under
a separate tab and thus reducing visibility for Groupon's daily
emails to subscribers.
That explanation was made more palatable by the fact that Groupon
is less dependent than it used to be on promotional emails.
Increasingly, its people are accessing its offers via mobile apps,
which have been downloaded by 60 million users. More than 40% of
transactions are now completed on mobile devices, according to the
For the future, it has a location-based app in place, pointing to
an enhanced ability to target consumers on the go with the right
"We have to even further
reduce our reliance
on email and whatever happens with Gmail becomes less relevant,"
CEO Eric Lefkofsky told the
Wall Street Journal
The second excuse involves revenue outside North America, which
fell 21%. Europe was a particular trouble spot, not all that
surprising as much of the continent struggles with soaring
unemployment and spending cuts.
That shortfall was offset, however, by a 24% increase in revenue
from North America.
The company also got points on its international position by
announcing its purchase of South Korea's Ticket Monster from its
biggest rival, LivingSocial, for an estimated $260 million cash and
Despite its name, Ticket Monster,
according to the
, uses the daily deals model to sell consumer goods as well as
tickets. About 90% of its sales are made through mobile apps.
Meanwhile, Groupon has been building up its website to offer a far
greater range of products and services, national and local, than it
originally envisioned when it was hawking coupons to merchants door
The expansion includes direct sales of products, and a network of
warehouses to support them. That draws inevitable -- and scary --
references to "the
The two sites are nothing alike, actually. Groupon is strictly for
bargain-hunters, the kind of shoppers who like nothing better than
browsing through the latest fire sales and finding a weird
selection of dog chews, blood pressure monitors, and guided tours
It's a long way from 2010,
the fastest-growing company in history. It was, too, as measured by
the breakneck pace at which it was opening offices to feed daily
deals websites in nearly 300 cities around the world, regardless of
It was, presumably, trying to get in ahead of the competition, and
it didn't work at all. By the time the daily deals frenzy peaked,
in 2011, New York alone had 40 competitors spamming the population
with coupons for pizza and nail salons.
It has settled down considerably since then, as has Groupon stock.
It plummeted after its $20 debut in November 2011, falling as low
But it's still standing, and still at the top of a short list of
most-visited coupon sites. A list of the
top-15 daily deals sites
in November, based on global traffic, shows Groupon as most-visited
site, with only LivingSocial and RetailMeNot coming close.
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