CHICAGO - Struggling online deals pioneer Groupon said Thursday it ousted CEO Andrew Mason and will look for a new chief.
Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis were appointed to the Office of the Chief Executive while a replacement is found.
Thursday's announcement after the stock market closed came as little surprise. The move had been expected for months.
The announcement came one day after online deals company Groupon Inc. reported a bigger-than-expected loss and gave a weak revenue outlook for the current quarter. The guidance had fueled investor worry that people are tiring of the myriad of online restaurant, spa and Botox deals that Groupon built its business on, and that the company's efforts to broaden into an e-commerce powerhouse haven't been paying off.
Groupon Inc., which went public in November 2011, makes money by taking a cut from the online deals it offers on a variety of goods and services. Investors have questioned whether that business model is sustainable and leads to growth over the long term -- and whether the company can not only grow its customer base but make more from each subscriber.
Groupon has the advantage of being first. This has meant brand recognition and investor demand, as evidenced by its strong public debut. But the model is easy to replicate, it has spawned many copycats after its 2008 launch, from startups such as LivingSocial to established companies such as Google Inc. and Amazon.com Inc. Chicago-based Groupon Inc. also has faced scrutiny about its high marketing expenses, enormous employee base and the way it accounted for revenue.
Groupon's stock has lost about 77 percent of its value since the IPO after losing $1.45, or 24 percent, to close Thursday at $4.53. After the announcement of Mason's ouster, the stock gained 4 percent in after-hours trading.
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