Marketing Pilgrim Published: "Groupon IPO Delayed Indefinitely; Should Mason Be the Next CEO to Go?" plus 3 more

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Groupon IPO Delayed Indefinitely; Should Mason Be the Next CEO to Go?

Posted: 07 Sep 2011 06:28 AM PDT

Question: What seemed to come up out of nowhere, generate too good to be true numbers, hype itself incessantly, act cute based on the supposed 'irreverance' of their young CEO, run up the hype on an IPO to unheard of levels, be found to be using creative accounting which caused IPO filing to go into a deeper review, have their CEO put together a memo to employees during their quiet period that just happened to be leaked and basically has told everyone to screw off because it's their way or the highway?
Answer: Groupon
The long awaited IPO for the daily deal player has been put off indefinitely and the excuse is that the market isn't right. In fine Groupon fashion they are using whatever is most convenient for them to not look as ridiculous as they are as a company. Bloomberg Businessweek reported

Groupon Inc., the biggest provider of online daily-deal coupons, is postponing its initial public offering and pushing back meetings with investors amid stock market swings, three people familiar with the matter said.
Groupon and its bankers were planning to pitch investors starting next week, said the people, who declined to be named because the company's plans are private. Chicago-based Groupon may still be able to sell shares before year-end, two of the people said.

Stock market swings? How convenient. That makes some sense but there are three real reasons why this IPO is being delayed and the stock market isn't one of them.

The hype – Everyone is seeing that Groupon has done an almost fiendish job of hyping their model and their 'success'. As people want this economy to turn around so desperately they bit on the hype. Groupon banked on that and won, to a degree. They turned down a $6 billion offer from Google and had the rumor mill getting their valuation up to the $25 billion range.
The accounting – In order to look profitable Groupon had no problem inventing accounting methods. The SEC doesn't take kindly to these kinds of activities and has been investigating these 'methods' based on the initial IPO filings from Groupon. As the delay has dragged on there are more and more questions as to whether Groupon was a Ponzi scheme or house of cards or (you put your own descriptor of a flimsy structure here) have arisen. All of this talk tends to put a damper on high valuations since the real truth is that Groupon is losing money and is simply not profitable.
The CEO – In my opinion, Groupon's CEO Andrew Mason is a huckster. He is young and acts as if the rules don't apply to him or his company. There's nothing wrong with confidence, in fact that's a necessary quality of an effective leader. It's when the confidence is a cover for arrogance and a seeming disdain for anything that gets in his way of getting to where he wants that is troubling. The final straw and real insight into Mason's modus operandi was the recent internal memo that was "leaked" to Kara Swisher of All Things Digital. We may not want to admit but it looks like he played everyone so he could get his point of view out into the marketplace during the IPO quiet period. The 'technique' was sneaky at best and just plain slimy at worst and speaks volumes to the character of the head of Groupon.

As a result, is it time for Groupon to look for other leadership? When your lead dog is characterized as childish by folks in the industry that is not the kind of image a company needs to project when they are trying to get people to invest in them. Take a look at this video from a Washington Post post and see how Mason's actions are explained. Also note another option provided by one of the interviewees.
The longer Andrew Mason is allowed to simply thumb his nose at the process and the rules of taking a company public the more damage he does to the brand. It quickly goes from "Oh, isn't he cool because he is doing his own thing!" to "What the heck is this guy up to?" and that's not good.
Many will argue that the process for going public are onerous and over done. That's probably true. Most things involving a federal agency get that way. While that may be disappointing to many it's still the current reality. As a result, it's best to do what you are supposed to do in order to get from point A to point B.
The trouble with Groupon is that they have not taken a straight line approach to navigate between the two points. Instead they have placed their trust in a CEO who is making as many huge mistakes as he has made successes. His mistakes seem to far outweigh what he has done right.
Is it time to consider what is happening at the top of Groupon? Is it time to see if there is a need to get a true business person with IPO experience in place to navigate these tricky waters? Something probably needs to happen because the way things have been handled to this point don't bode well for the future of the company.
What's your take?

Carol Bartz Out As Yahoo CEO

Posted: 07 Sep 2011 04:52 AM PDT

For almost three years now Carol Bartz has been at the helm of Yahoo and it's been quite a ride. The first two years especially were just one 'event' after the other and she has supplied boatloads of posts and quotes that were entertaining enough to discuss but usually left us scratching our heads as to what she was actually trying to accomplish as the CEO of one of the most maligned web companies on the planet.
As if to add whatever (insult just isn't the right word) to injury, she was notified of her firing by phone and then she turned around notifying her staff of her situation with this e-mail:

From: "Carol Bartz"
To: "all-worldwide@yahoo-inc.com"
Subject: Goodbye
To all,
I am very sad to tell you that I've just been fired over the phone by Yahoo's Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward.
Carol

The truly perfect ending for Bartz's contentious and, well, somewhat baffling tenure as the Yahoo CEO, would have been an F-bomb ridden tirade which really seemed to be more her style. But instead we have heard little from her in the recent past, other than to be on painful earnings calls where she was reminded that her ship was going down like the Internet's Titanic. Anything she was doing in recent months looked more and more like reshuffling the deck chairs on the voyage of a doomed ship.
Just for a quick stroll down memory lane do you remember this classic from Carol about whether or not she would sell Yahoo to Micorsoft.

"If there's boatloads of money, and there's the right technology, and the information we would have to have, then yeah….It's that simple."

Many journalists like Kara Swisher and Michael Arrington were able to turn Bartz's penchant for making a longshoreman blush with her language into some talked about moments. Many found them funny but I found it rather sad that Bartz made news more often for dropping an F-bomb rather than making sound business decisions at Yahoo. But hey, we played along, didn't we?
So what's next for Bartz? Let's put it this way, she shouldn't be hurting for cash. While her reign over Yahoo will be one that is not looked at favorably in a business sense, she walked away a wealthy woman. So for that you have to raise your glass because she now becomes another in a fine line of underperforming CEO's who managed to do little or nothing to effect real change but still cash out big time. She was able to walk away with a lot of cash because one of ways of affecting change was to layoff people. So she can feel good now when she puts her head on her pillow at night, many people are probably still out of work so she can live in style.
In the end this isn't so much a story about Carol Bartz being fired. Instead it's about a company losing its way and not putting the right person in place to help them get back on track.
Now, Yahoo has the chance to make a big name hire to inject some life into the company. Or maybe this is really the beginning of the end for the once proud web property. They still get boatloads of traffic to their home page portal and Yahoo mail still has plenty of users. It's the trying to be all things to all people approach that has turned the company into a bit of an industry joke. Right now their CFO, Tim Morse, has been named interim CEO. With the way Yahoo is run these days it's almost irrelevant who is at the helm. When you have run aground there isn't much sailing to do is there?
As for who might want to come in and try to turn a company around using content production and distribution as the main thrust of their effort? That will be interesting to watch. All one has to do is ask Tim Armstrong how well that plan is coming together at Aol as they prepare to sell off bits and pieces of their own existence.
Let's face it. Aol and Yahoo are perfect examples of the dark side of having a powerful brand. When you are at the top, your brand is your prize. When you are at the bottom it's more like a millstone around your neck.
So farewell, Carol, thanks for the boatloads of post fodder. I don't expect that your next gig will be in the Internet space so I hope whoever hires you likes their CEO's laced with f-bombs.

Increasing Percentage of Online Shoppers Can't Get No Satisfaction

Posted: 06 Sep 2011 01:07 PM PDT

More people than ever are shopping online. That's the good news. The bad news is that customer satisfaction is dropping and shopping cart abandonment is on the rise. (Don't hate me, but I abandoned two just this weekend.)
iPerceptions has a new report that looks at post shopping experience feedback. What they found was that overall customer satisfaction was down from 73% last year to 70% this year.
The biggest concern is that only 60% of customers who came to buy walked away with what they came for. Says iPerceptions,

"For a business that does $10 million per year in online sales, a 60% Task Completion rate among buyers means $6.7 million in business is simply walking away."

For the small business owner, losing even one sale can really hurt, let alone 40%.
Why did shoppers leave unhappy? 42% said they couldn't find what they wanted and 30% said the product wasn't available. Lack of product info and unclear pricing also played a part in the walk-away.
Technical issues, which used to be a big barrier, only came in at 2%, so that's good news for e-commerce as a whole.
I shop online a lot and there are two big reasons I walk away from a shopping cart. One is add-on charges. I shop at a webstore that has a very bad habit of showing a cheap shipping rate on my cart up until the moment I go to pay, then it socks me with a number three times that amount. I also use a lot of coupon codes, and intensely dislike stores that don't allow me to enter them upfront so I can see my discount, or make it so hard to enter them that I give up.
Another reason I walk away is because of an embarrassment of riches. I recently started shopping at an online scrapbook store that simply has too many items. Each category has multiple categories and every item I click shows me ten more items. I often get overwhelmed by the choices and leave. iPerception says that a lack of focus is a big problem for e-commerce sites since customers constantly demand more, more, more. The trick, they say, is to eliminate the "tiny tasks" and focus in on what it is the majority of people want to do and find when they hit your website. Easier said than done, but it's something to think about.
Confession time. When was the last time you abandoned a shopping cart and why?

Movie Biz Cashes in on Early Online Marketing

Posted: 06 Sep 2011 12:25 PM PDT

The Girl with the Dragon Tattoo opens in theaters just before Christmas, but the teaser trailer popped up on the web back in March. The studio claimed it was "leaked" but it's quite likely that it was "leaked" on purpose in order to create buzz for the film.
Early advertising is paying off for the movie biz in a big way as more and more people go online to search for news of coming films. According to an article on MediaPost, studios have seen huge spikes prior to a film's release such as an 8,510% rise on searches for "The Help" in the past 30 days. That's a lot of buzz.
What's interesting about movie advertising is that it has a short shelf life compared to a product like dishwashing detergent or a local cafe. It's a cycle that is understood by seasonal retailers like those who sell Halloween costumes or Christmas trees. But what if we take The Girl with the Dragon Tattoo scenario and apply that to a Halloween costume webstore? Is ten months too early to begin advertising your wares? How about six months? Does timing even matter anymore?
Certainly, you don't want to blow your budget on Halloween ads two days before Christmas, but advertising earlier than normal could pay off. Remember, we're a highly suggestive bunch, so offering deals on Halloween costumes in June might not be as ridiculous as it sounds.
Then there's the concept of the teaser trailer. These are short clips that are designed to intrigue an audience long before the actual trailer is released. Some don't even include the name of the movie, such as the teasers for Cloverfield and the new Star Trek movie.
How would that work out for your business? Is there an intriguing visual that you could circulate via social media and YouTube? Something that would get people talking and guessing? The internet has the power to blur holiday shopping cycles. There's no shelf space to worry about, so you can sell Christmas ornaments 365 days a year, and there are people that will buy them in June as well as December.
Consider this one of those 'thinking out loud' posts. Take a few minutes today to think about your seasonal business and how you could extend your season by a few weeks or a few months. If Hollywood can sell a movie ten months before the tickets are available, you can sell Halloween costumes in May.