What was expected to be one of the hottest stock offerings of the year fell into deeper turmoil yesterday, as daily deals pioneer Groupon said it was cutting its reported revenue in half, and its No. 2 executive left the company, according to The Wall Street Journal.
Groupon said it will now report revenue excluding the money it pays out to merchants. The change came in an amendment to its IPO documents -- the third such amendment -- and was requested by officials at the U.S. Securities and Exchange Commission. "Some felt the 'gross revenue' figure -- a term for what are actually gross billings -- was not reflective of Groupon’s true performance,'' reports AllThingsD's Kara Swisher.
The new formula reduces Groupon's stated revenue for 2010 to $312.9 million, down from the $713.4 million previously reported, the WSJ says.
Also yesterday, the company disclosed that COO Margo Georgiadis is returning to her former employer, Google, after just five months on the job at Groupon, Swisher says. Not the sort of thing you want when you're trying to sell your IPO to Wall Street.
Three-year-old Groupon's latest stumbles come amid an IPO that's brought intense speculation from investors over the company's business model. Gannett's DealChicken and scores of other newcomers crowd into a market where start-up costs are soaring.
In June, Groupon filed its IPO plan with federal regulators. I don't know whether there's a launch date. Founder Andrew Mason has been on the defensive over recent media reports about Groupon's slowing growth and other red flags.
Google, you'll recall, came close to buying Chicago-based Groupon for up to $6 billion back in December, before Groupon unexpectedly walked away.
(Note to USA Today Publisher Dave Hunke: If you want to see a truly superb web vertical at work, read AllThingsD, which is owned by the WSJ's parent company. Only this week, Swisher beat the pants off the competition on the Hewlett-Packard CEO shakeup story.)
Meanwhile, at AOL's Patch...
Arianna Huffington and the management team yesterday announced that freelance budgets have basically been slashed to the point of extinction, according to Business Insider, which cites a source it doesn't identity.
Gannett Blog's Anonymous@1:21 a.m. comments: "Patch cuts content budgets, and the two-year-old buzz around hyperlocal continues to die a slow death."
Launched in 2007, Patch news sites are now in more than 500 U.S. communities.
One self-described "riled" Patch editor from the East Coast tells Business Insider that, in addition to his or her normal job responsibilities, they've also been asked to start drumming up ad sales leads.
"Requiring journalists -- already run ragged by their normal duties -- to do this is so far beyond the pale it actually makes my stomach hurt," Business Insider quotes the editor saying.
Think you want to work for Patch? Read the full Business Insider post for the long, long list of duties assigned to site editors.
Still interested?! Here's a list of Patch job openings.
Groupon said it will now report revenue excluding the money it pays out to merchants. The change came in an amendment to its IPO documents -- the third such amendment -- and was requested by officials at the U.S. Securities and Exchange Commission. "Some felt the 'gross revenue' figure -- a term for what are actually gross billings -- was not reflective of Groupon’s true performance,'' reports AllThingsD's Kara Swisher.
The new formula reduces Groupon's stated revenue for 2010 to $312.9 million, down from the $713.4 million previously reported, the WSJ says.
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| Georgiadis |
Three-year-old Groupon's latest stumbles come amid an IPO that's brought intense speculation from investors over the company's business model. Gannett's DealChicken and scores of other newcomers crowd into a market where start-up costs are soaring.
Google, you'll recall, came close to buying Chicago-based Groupon for up to $6 billion back in December, before Groupon unexpectedly walked away.
(Note to USA Today Publisher Dave Hunke: If you want to see a truly superb web vertical at work, read AllThingsD, which is owned by the WSJ's parent company. Only this week, Swisher beat the pants off the competition on the Hewlett-Packard CEO shakeup story.)
Meanwhile, at AOL's Patch...
Arianna Huffington and the management team yesterday announced that freelance budgets have basically been slashed to the point of extinction, according to Business Insider, which cites a source it doesn't identity.
Launched in 2007, Patch news sites are now in more than 500 U.S. communities.
One self-described "riled" Patch editor from the East Coast tells Business Insider that, in addition to his or her normal job responsibilities, they've also been asked to start drumming up ad sales leads.
"Requiring journalists -- already run ragged by their normal duties -- to do this is so far beyond the pale it actually makes my stomach hurt," Business Insider quotes the editor saying.
Think you want to work for Patch? Read the full Business Insider post for the long, long list of duties assigned to site editors.
Still interested?! Here's a list of Patch job openings.
Department of Small World: Swisher lives around the corner from me in San Francisco.
ReplyDeleteThese coupon sites quickly become a pain in your email's in box. Most coupons while offering nice discounts, are for products or services that have limited appeal. A classic internet "flash in the pan", deal chicken will never be a big deal.
ReplyDeletePatch is a great deal if you like working seven days a week, and your days begin with cop calls in the morning and end with the same at night.
ReplyDeleteSell ads, too? As Huffington might say: "You must organize your time better, darling."
Excellent roundup, Jim. Thanks for helping us compare the hype and self-promotion with the truth.
ReplyDeletePatch is the future of journalism: understaffed reporters and editors running themselves ragged, filing an endless stream of meaningless stories in multiple formats, responsible for business as well as news -- and ultimately failing.
ReplyDeleteSorry. Guess I'm getting my gloom on today.
The Patch situation highlights the problems facing journalism today.
ReplyDelete1. We can't continue to give our content away. Someone has to come up with a modern day business model. You can have the best news site in the world but you are doomed unless the reader has to pay.
2. It's time journalists and every other employee that revenues, pay for use and advertising, Are the basis of the business model. No revenue no journalism. Castigate Gannett leaders all you want, the fact is no major media company has figured it out.
Before you "yes but..." my comment let's start a dialogue about what the business model if the future should look like.
Our entire industry is in significant danger. Let's stipulate everyone is stupid and to blame and then have a real discussion.
What is our industry going to do.
PS: please don't take the easy way out and talk about quality of journalism. If it's free it diesnt work.
Patch: A poor man's Gannett!
ReplyDeleteAs soon as PuffyHo got her $300M+ payout from AOHell, the whole operation, including Patch, jumped the shark, IMHO.
ReplyDeleteTrying to read anything into the difficulties facing Patch as having any bearing on the future of online journalism is misinformed.
ReplyDeleteThe problems with Patch are endemic to any attempt to "scale" local journalism and have little to do intrinsically with online.
Name one major media corporation that owns several local news orgs?
Never in the history has a national news corporation started as a national news corporation. They all started small and grew.
You can't serve two masters -- innovation and disruption vs. investors. If you have investors, investors win every time and kill the innovation.
There are dozens of small, independently owned news sites that are doing well, making money and growing. That's the model to be emulated and considered, not Patch.
Yeah. Listen to Howard Owens at your own risk. I think his "news" model is listening to the police scanner and then typing in, word for word, what's said.
ReplyDeleteS5:55 since there are sobmany making money would you please give us the names of the sites that made over $1,000.000 in profit last year? Anything less and it's a hobby.
ReplyDeleteDeal Chicken is so "Gannett." Jumping onto a bandwagon that is already on it's way out.
ReplyDeleteWell, surprise, surprise. Did not we all predict this would happen? Look back on the postings on this blog. This is worse than criminal. What an outrage and look at the jobs it cost us.
ReplyDelete