Oh wow. According to “sources familiar with the matter” Groupon’s board of directors are considering axing the group buying service’s founder and CEO Andrew Mason. Several reports have cited sources to close the situation confirming that Mason could be replaced as CEO.
According to AllThingsD, the company’s board is set to have its regularly scheduled meeting later this week, where issues such as leadership changes is set to be discussed “due to increasing frustration by some directors about the novice CEO’s performance so far”.
It seems the main issue revolves around the CEO’s lack of experience, and the fact that the company’s shares have dropped at least 80% since its initial public offering a year ago.
“He’s young, he’s inexperienced, he’s running a company which spans multiple countries all around the world, and he has no previous operating experience,” said Sameet Sinha, an analyst at B. Riley & Co. tells Bloomberg. A new CEO “with some gray hair could bring on some strong operational experience.”
Group buying is a highly contested space with many clones popping up all over the world since the first wave of success hit with Groupon’s launch. The Chicago-based company has bought out a number of these clones around the world and brought them into to core Groupon fold.
However it seems that the young CEO has not been able to build on the momentum of the initial grouping buying frenzy. Some suggest that perhaps the company needs a more experienced eye to help steer the ship with Mason.
“The question is not whether Andrew is a good guy, but whether Groupon needs an Eric Schmidt,” said one person close to the situation to AllThingsD, referring to the former Google CEO, who was brought in to work closely with the company’s two founders during its critical years. “And there’s been a lot more pressure now on the board to consider this seriously.”
Mason seems to have found himself in a rather precarious situation as a key player in the eight member board. Though reports say that he will find support in the form of director and former AOL exec Ted Leonsis, Mason also admits he too would fire himself if he wasn’t up to the task.
“It would be weird if the board wasn’t discussing whether I’m the right guy to do the job, and it’s their chief responsibility to ask that question,” said Mason, quoted in Bloomberg.
Interestingly, board is yet to say anything about the rumours and a Business Insider report suggest that the likely situation is “a couple of board members want to oust Mason and a couple of board members don’t — and that the ones who do want to oust him blindsided him”.
Whether Mason is fired or not remains to be seen, what is important and clear is that Groupon needs a major fix up. Perhaps he should have sold to Google when he had the chance.