It was the “WHAT?” heard around Chicago’s tech and business community 10 years ago today: E-commerce deals platform Groupon spurned a US$6bil buyout offer from Google and chose to go it alone.

The rejection came during heady times for Groupon, which launched in the fall of 2008 with a two-for-one pizza deal at a Chicago bar and quickly became Chicago’s tech darling. By late 2010 it had grown to some 1,500 Chicago-area employees and moved into international markets. Forbes, in a cover story, proclaimed it the fastest-growing company in history.

Consumers waited for the daily email blast with the deal of the day from a local business, communicated by a team of writers who favoured cheekiness. “I’ve got a Groupon” became the rallying cry for waxings, restaurant outings and cleaning services, and was welcomed by merchants trying to climb back from the Great Recession.

But much has changed since then. Here’s a quick catch-up.

The Google offer

Groupon reached out to Google while the Chicago company was being courted by Yahoo, according to co-founder Andrew Mason. Yahoo “was kind of this graveyard for cool companies”, Mason told New York Magazine in 2018.

But despite initiating the conversation, Groupon passed on Google. “We looked at our numbers, and we were just growing faster than ever,” Mason told the magazine. “We looked at the offer we were getting from Google, and Google seemed like it could have been a great home. But we felt like it was fun to do an independent company, and we thought we could make more money doing it that way.”

Going public

A year after walking away from Google, Groupon went public, pricing its initial public offering at US$20 a share and raising US$700mil in what at the time was the largest initial public offering by a US tech since Google in 2004. Its valuation at the end of its first trading day was US$16.6bil .

It came back down to earth pretty quickly. Less than two weeks after its debut, shares tumbled and it’s been a bumpy ride ever since.

In June, the company had a reverse stock split, where every 20 shares were converted into one share. The move came after the stock was trading as less than US$1 in March, a sum that could have led to a stock delisting by Nasdaq.

On Wednesday, shares closed at US$31.40 , giving it a market cap of US$905mil .

Changes at the top

Competitors were soon nipping at its heels, results started to falter, and the buck stopped at CEO Mason’s door. He was fired in February 2013 and moved to the West Coast.

Co-founder Eric Lefkofsky took over as CEO. In November 2015, chief operating officer Rich Williams replaced Lefkofsky and said he’d emphasise Groupon’s marketplace and Goods products rather than daily deals.

Williams was ousted in March.

Running the company now is Aaron Cooper, who joined Google in 2010 and had most recently served as North American president.

Restructurings

There have been several over the past decade, with the company cutting employees and changing its focus back and forth between daily deals and merchandise sold through Groupon Goods.

This year, in April, Groupon said it would lay off or furlough about 2,800 employees, representing 44% of its workforce. Its board adopted a shareholder rights plan, commonly called a “poison pill,” to defend Groupon against any bids to take control of the company.

In May, the company put up for sublease 150,000 square feet of space at its headquarters at 600 W. Chicago Ave.

For the first nine months of 2020, Groupon lost more than US$300mil , compared with US$91mil in the year-ago period.

Pandemic purchases

Interim CEO Cooper has been upbeat in recent earnings calls with analysts and investor presentations. The path forward includes offering deals with few restrictions and lower discount offers.

The trend toward self-care during the pandemic has helped Groupon. Just in the three months that ended in September, customers in North America spent almost US$20mil on massages, and more than US$15mil on Botox, Cooper said.

“I will say that even though Covid certainly makes things harder, we have clear momentum on the merchant side,” Cooper said during a third-quarter earnings call last month. “The merchants are engaged. They’re saying yes to bringing the customers back and back repeatedly and... we know that more inventory is what our customers want, so that we know that we’re on the critical path to growth.”

 - TNS