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Groupon's National Sales Chief Leaves Company

  |  August 26, 2012   |  Comments

A four-month employee who was previously working on Groupon Goods has replaced Lee Brown.

The top sales executive credited with building Groupon's national sales team has left the company, Groupon confirmed Friday. The departure of Lee Brown, head of national sales, came just two days after the Wall Street Journal reported that Groupon's top saleswoman, Jayna Cooke, is also leaving the company.

Raj Ruparell, a four-month employee who was previously working on Groupon Goods, has replaced Brown effective immediately, a Groupon spokesperson confirmed. Brown joined the company in 2010 from Yahoo.

Following its initial public offering a little more than nine months ago, Groupon's stock tanked 83 percent to an all-time low of $4.46 on Friday. Company stock spiked to $26.19 exactly two weeks after it went public and it has steadily declined ever since. Barely a year has passed since Groupon was routinely regarded as one of the fastest growing companies ever. The company, which gained prominence through its daily deals business, has suffered a series of key personnel departures and investors are reacting negatively to its latest earnings report.

One area of significant growth is Groupon Goods, a product-based business that has more similarities with Amazon. The division tallied $65 million in revenue in the most recent quarter, marking a nearly 71 percent increase from $19 million in the previous quarter.

Considering Ruparell's elevation from Groupon Goods to national sales, it's safe to say Groupon is undergoing a transition that will make it less reliant on coupon sales for growth. During its earnings call with investors earlier this month, co-founder and CEO Andrew Mason spent considerable time discussing the Groupon Goods business and how the company is transferring its value proposition from local deals to goods. But he also freely admitted that Groupon has its work cut out.

"We still don't have a lot of basics that we think will drastically improve the customer experience. We don't have a very ‘shoppable’ marketplace where customers can come in and pull deals. We only really allow customers to engage with the good deals on our terms via e-mails that we're sending every week. So there's an awful lot to do," he said.

After it reported its second-quarter results earlier this month, Groupon's stock price took a beating. Revenue was up 45 percent year-over-year to $568.3 million and it turned in its first-ever profit of $28.4 million, exceeding analysts' estimates. In the year-ago period it lost $107.4 million.

The real problem for Groupon is that it needs to grow at a rapid pace and revenue only climbed 1.6 percent from the previous quarter.

"It was really exciting to see how fast their revenues were growing," said John Fletcher, a senior analyst at SNL Kagan. But investors have a short attention span and those days appear to be a distant memory now.

"Their business model is really easy to replicate. There's no major barriers to entry," Fletcher said. "In new media if your top line starts to slow down all the investors will run for the door."

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ABOUT THE AUTHOR

Matt Kapko

Matt Kapko has been writing about mobile since 2006, before it became cool. Based in Long Beach, CA, he has covered mobile entertainment, digital media, marketing, and advertising for several business media outlets. A former editor and reporter for RCR Wireless News, paidContent, and iMedia Connection, Matt is a regular freelance reporter for ClickZ. You can follow Matt on Twitter at @MattKapko or drop him a line at matt@kapko.co.

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