News Byte: Groupon Names Eric Lefkofsky CEO

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Eric Lefkofsky. Photo Credit: Chicago Magazine
Eric Lefkofsky. Photo Credit: Chicago Magazine

Groupon announced the appointment of cofounder Eric Lefkofsky as permanent CEO yesterday. It also reported a 7% rise in revenue for the Q2 of the fiscal year to $608.7 million.

In February Groupon fired its cofounder and former CEO Andrew Mason after the 2012 Q4 results revealed a net loss of $81.1 million or $0.12 per share. Lefkofsky and Groupon chairman Ted Leonsis, stepped up to serve as interim co-CEOs as the hunt to fill Mason's position began.

Even beyond C-level shakeups, Groupon has had a rocky journey this past year. Lee Brown, SVP of national sales, left the company on August 24 of last year—shortly following the departure of Groupon's top salesperson Jayna Cooke just three days prior.

However, the company was publically optimistic following its quarterly results.

“We significantly exceeded our operating income expectations, and delivered our strongest quarter ever in North America, due in part to accelerated billings growth of 30%,” Lefkofsky, said in a press release. “With two quarters on the job, I'm pleased with the progress we've made in such a short time.”

Nevertheless, the road to recovery continues to be a precarious one. Despite the 7% rise in revenue, Groupon reported a 2013 Q2 net loss of $7.6 million or $0.01 per share. Groupon also revealed a 2013 Q2 of gross profit of $384.7 million, compared to a 2012 Q2 gross profit of $433.2 million. And although Groupon's 2013 Q2 operating income totaled $27.4 million compared to a 2012 Q2 operating income of $46.5 million, the company's operating income increased $6.2 million compared to Q1 of this year.

Groupon has been bullish in its mobile investments. Approximately 50% of North American transactions were made via mobile devices this past June compared to 30% last year, according to the press release. In addition, more than 50 million people have downloaded the Groupon apps. In fact, more than 7.5 million people downloaded the app in 2013 Q2 alone. Contrastingly, direct email was responsible for less than 40% of Q2's North American purchases.


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