Groupon Inc (NASDAQ:GRPN)’s New Operations Chief Promises to Turn Around Company in two Quarters
Daily deals site Groupon Inc (NASDAQ:GRPN)’s new operations head has his work cut out for him.
Heralded as a fast-growing company with a sound business model, the company has floundered in recent months.
The shares of the company have fallen about 75 percent since its IPO in November 2011. The economic crisis in the Eurozone has slowed down its revenue growth. Its Groupon Goods business, a low margin activity, is seen to be squeezing its profitability.
Former Amazon executive Kal Raman, who took charge in April, is trying to overhaul the functioning of the site and convincing Wall Street analysts that Groupon that it is serious technology firm and its business model is still robust.
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One of the first things that Raman has done is to overhaul its payments system, streamline its sales support functions and introduce new technologies.
He is also overseeing the daily operations of the firm now, taking over from co-founder and Chief Executive Andrew Mason, who is facing a crisis of confidence, especially after the weak second quarter results of the company.Raman has promised that the results of his restructuring will be seen in another two quarters from now.
"The buck stops here," he said in an interview to Reuters, adding that Mason should no longer be held accountable for lack of revenue growth.
Wall Street analysts are more optimistic about the company with Raman at the helm of affairs as they feel he has the requisite experience to run the company.
Shares of GRPN are up over 1% in early trade.