Groupon's Next CEO Must Choose Which Business It's Really In
Whoever replaces him as CEO of the Chicago-based Internet-commerce company will need to decide if that's going to be true.
Groupon is really in three businesses today: a declining daily-deals business; a nascent local-commerce business; and a booming e-commerce business.
The first two, combined, form what Groupon calls its "third-party" business—in other words, where Groupon primarily serves as a marketer for other merchants. While traditional daily deals are wearing out their welcome with consumers and merchants, Groupon has kept this business growing by offering a wider variety of services, marketed not through the gimmicky group-discount model but based on proximity and preference.
The third, Groupon Goods, is what's called a "curated" e-commerce business. Instead of trying to provide a comprehensive selection, Groupon offers a surprising, eclectic mix of products that it sells directly to consumers. It's growing explosively.
And with Mason gone, Groupon Goods is the business that Groupon's remaining management team knows how to run—more than half of them worked at Amazon.com. None of them have substantial experience serving local businesses outside of their work at Groupon.
Groupon could correct that with its next CEO hire. Or it could double down on the e-commerce bet, which so far seems to be exceeding the company's own expectations.
One intriguing candidate is Sebastian Gunningham, Amazon's senior vice president of seller services.
Gunningham was previously thought to be a candidate for the COO job that went first to Google executive Margo Georgiadis, who made a quick round trip back to the Googleplex, and then to Kal Raman, one of the many Amazon veterans running Groupon.
Gunningham has stepped in for a founder before, at his job as CEO of Peace Software. And he has worked at Oracle and Apple—a blue-chip resume reassuring to Wall Street. He also has some of the international experience Groupon needs, as it tries to correct the gap between the productivity of its U.S. and overseas operations.
(One question mark hanging over Gunningham is the odd way he disappeared from Amazon's list of top executives in its annual report, a change about which Amazon has been tight-lipped.)
Hiring someone like Gunningham, though, would be a sign that Groupon is doubling down on its e-commerce bet, at the expense of its vision of serving local businesses.
It's far harder to see plausible CEO candidates with experience running technology-driven marketing platforms for local businesses—what Groupon's daily-deals business could eventually evolve into.
That vision of a local-business operating system is perhaps unique to Mason. And with Mason gone from the company he founded, perhaps it's time for the company to move on from that idea, too.