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Groupon Inc (GRPN) Rallies After Departure of CEO

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Groupon Inc (NASDAQ:GRPN)Just as Groupon Inc (NASDAQ:GRPN) was beginning to look like a declining business, the company surprised everyone by leaping back to life after the company ditched CEO Andrew Mason. The ultra-popular daily deal site boasts 200 million subscribers and $601.4 million in revenue for its last quarter. Still, things looked bleak for the company late last year as the company’s share dropped to less than $3 per share.

The company’s increase of 8% for its first quarter is partly being attributed to the departure of Mason, who recently announced he’d be a part-time partner at a start-up called Y Incubator. While Mason is credited with founding the company, he was also blamed for its repeated poor results. It didn’t help that CNBC named him “Worst CEO of the Year” for 2012.

Pull, not push

Groupon Inc (NASDAQ:GRPN)’s initial business model was simple. E-mail deals to customers and entice them to participate in a daily deal. Instead of relying on this business model, which the company calls a “push technique,” Groupon now plans to “pull” customers in by helping them find deals via search rather than waiting for coupons to arrive in their inbox.

According to Groupon Inc (NASDAQ:GRPN)’s CEO, mobile device users buy 50% more than their desktop PC users do. The service has already added a “search for deals” box to its site in certain cities and plans to beef up offerings. As Groupon points out, there are only so many deals that can be sent by e-mail. This new search box will let customers enter a specific term (i.e. “pizza”) and find deals specifically related to that. While the company will continue to send e-mails, the search functionality opens up Groupon Inc (NASDAQ:GRPN) to new possibilities for growth.

The pull concept may work even better for Google Inc (NASDAQ:GOOG) Offers, since the company can use its own search engine to reach customers. In fact, Google recently added offer extensions into its AdWords, letting businesses advertise their deals through the AdWords platform. When a company searches for a product or service, the offers appear in search results, increasing exposure for that business. This is only one area for the company whose net earnings reached $3.9 billion in the first quarter.

However, since mobile is still a weak spot for Google Inc (NASDAQ:GOOG), an increase in ad revenue could help increase its bottom line. Google Offers can be found through Google searches, as well as being incorporated into Google Maps for Android, Google+, Google Wallet, and more.

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