Groupon Misses Earnings...

Groupon just announced its first earnings since its IPO in November . For the fourth quarter of 2011, it reported revenue of $506.5 million, beating analyst estimates of $473 million. It’s also profitable, with net income of $15 million. The company’s numbers are up almost across-the-board compared to the same period last year — revenue is up 194 percent, income is up from a $336.1 million loss. However, Groupon came up short on earnings per share, coming in at negative $0.02, rather than the positive $0.03 EPS that analysts were expecting. (That number includes a $0.07 cent tax from international operations.) As result, at 4:20pm Eastern, Groupon was down 11.3 percent in after-hours trading. In its guidance for the first quarter of 2012, Groupon is projecting revenue between $510 million and $550 million, and operating income between $15 million and $35 million. The earnings call starts at 4:30pm Eastern — I’m liveblogging it below. 1:35pm: CEO Andrew Mason says it was “phenomenal year” for Groupon. Revenue was up 420 percent. The fourth quarter was also the first profitable quarter since Groupon’s international expansion. The company has quadrupled technical headcount and opened a tech-focused office in Palo Alto. 1:38pm: Mason says earnings reflect a validation of Groupon’s ideas. Rapid growth reflects the size of the market. “We believe we are on the cusp of a sea change” in behavior. “We’re about to see what technology can do for local commerce.” He also says Groupon is finding early success with deals personalized to user demographics and other data, with higher engagement and satisfaction rates. 1:42pm: Now they’re going over the finances in detail, which we covered in a separate post . Among other things, they talk about the success of Groupon’s Christmas-themed Grouponicus promotions and says there will be other “occasion-based” promotions. A lot of discussion about marketing spend. Company says it will continue to “invest aggressively” in technology and staffing. 1:53pm: Full-year capital expenditures were up $43.8 million. The increase reflects more technology spending. 1:55pm:  Question and answer session starts. How have changes to competitive landscape affected investment strategy? Mason says historically that’s not how Groupon has worked, even though it’s “encouraged” by developments in the market. 1:58pm: More information on the high tax rate? CFO Jason Child said 3 cents of the tax was related to the establishment of the international headquarters in Switzerland. This gets pretty complicated, but it sounds like a lot of this is related to the fact that Groupon is seeing dramatically difference results in different countries, where it pays local tax rates. All regions and all countries should be profitable “in the next year or two.” 2:01pm: Question about hiring. Mason says many newer projects, like Groupon Rewards, are more technologically complex. “It’s pretty remarkable, magical stuff that we think is going to create a more comprehensive marketing suite for our merchant partners but more value for consumers but it obviously takes deeper investment.” 2:03pm: What is the impact of personalization of deals? Right now, personalization that we’re doing is around a user’s location. “We’re making incremental improvements every quarter.” This quarter or in Q2 there will be a thumbs up, thumbs down mechanism to rate deals, as well as a personalization wizard that will collect “the fundamental information we need to improve a user’s experience.” 2:05pm: Any metrics or data points about Groupon Now? Customers who have purchased a Now deal are better customers who spend more in general on Groupon. “Everything’s on-track.” Plans to roll out to additional markets in US and to UK later this quarter or in Q2. 2:07pm: Mason says there’s a lot of ways Groupon marketing is getting smarter. For example, it’s investing more heavily in transactional marketing, which is supposed to drive actual purchases, not just subscriptions. 2:09pm: Child talks about guidance, with caveats about uncertainty in seasonability and broader economic trends. 2:10pm: What are merchant satisfaction levels as measured by repeat rates? Mason notes that Groupon previously said that more than half of merchants featured on Groupon were featured in the past, and he says the number of repeat merchants has only gone up since then. And has reduced marketing spend affected growth? Mason says it hasn’t. 2:14pm: In terms of tracking consumer engagement, Mason touts high engagement rates for “how was your experience?” emails. He also says Groupon surveys its customers and looks at spending behavior broken up by cohorts (i.e., when they joined the site). 2:18pm: What kind of results do you see from new merchant products? Mason said it’s too early to measure the affect on merchant frequency, since most merchants only list Groupons a few times a year at most. However, merchant satisfaction is up, which suggests that there will be increased engagement in the long-term. 2:21pm: 31 percent of revenue going to marketing is not something that’s going to hold steady. After all, that percentage used to be more than 100 percent. Whether it will get down to 5 or 10 percent, “it’s going to take a little while.” 2:23pm: Another question about reception for newer products like Groupon Getaways. “We feel great about how well the assets that we’ve acquired over the last three years of building a local commerce business have translated into these new spaces.” Mason says he was “shocked” by the high percentage of Groupon Getaways purchased from mobile devices during the first week — he attributes that to the trust that Groupon has built. 2:25pm: Can Groupon offer more info about how new products fit into first quarter guidance? Child says we can expect to see the Getaways expand to more features and more partners. “Assume that we’re very happy with the progress.” Groupon has to make an investment whenever it launches a product, but over time, that investment goes down. Child declines to say how that will affect first quarter numbers. 2:28pm:  Mason: “Thanks guys, this was a lot of fun. Look forward to many more of these.”

UPDATE: Executives Of S...

Details are sparse and we have calls in, but the two execs at Klarna , Jens Saltin and Niklas Adalberth, were arrested at the W Hotel in New York for alleged molestation. The victim was a 19-year-old tourist from Texas. Saltin and Adalberth are currently out on $10,000 bail. According to the NY Post , “Adalberth allegedly straddled her body while he and Saltin ripped off her clothes and fondled her.” Klarna is a Sequoia-backed start-up and was a runner-up for Best International Start-up at the Crunchies. More information as we have it. UPDATE – Updated with information supplied by Niklas Adalberth’s lawyer.

Nine Months From Launch...

Mobile advertising took off in 2011, as tablets went mainstream and it seemed as if half of the world woke out of a daze to find they were holding some sort of Apple device. Meanwhile, advertisers and developers are increasingly relying on mobile and in-app advertising to boost revenues as consumers become more comfortable with being served ads while on the go. The mobile app community needs to monetize via ads, which is why San Francisco-based startup, Chartboost , launched a direct-deals advertising marketplace for mobile gaming in May of last year. For those unfamiliar, Chartboost’s mission is to enable mobile app developers to use cross-promotion to increase the size of their user base (and in turn, revenues). Created by former Tapulous employees (Tapulous was acquired by Disney in 2010), Maria Alegre and Sean Fannan, the marketplace differs from traditional mobile ad networks in that game publishers have the ability to construct direct deals amongst themselves, allowing them to bypass the hefty price of revenue-shares with ad networks. As Sarah wrote last month , Chartboost offers a freemium model, meaning that “the ad-server technology is free when used for direct deals or internal cross-promotion, but the opt-in ad network offers revenue sharing with publishers.” Chartboost’s play has represented big potential for mobile game app developers, filling a serious need with its direct deals marketplace model (by providing an alternative to mediating deals through ad networks with technology and an SDK), enabling developers to easily fill unused spots with ads when the need arises. Not to mention the most disruptive part: It’s free and claims to give developers a 50 percent boost in revenues. This has led to fast growth for the young startup, as its network already spans more than one thousand iOS and Android apps, leading Chartboost to begin rolling out its network in Asia last month, with plans to pursue further international expansion in both Europe and Latin America over the course of the year. Since its launch in May of last year, just nine months ago, the startup announced yesterday that it has served up more than one billion impressions. According to the Chartboost team, the marketplace’s traffic has seen a jump in traffic over the last few months, contributing the bulk of its one billion impressions. The company is off to a promising start, signing a deal with TinyCo in November, bringing its marketplace to Android in December, and has forged partnerships with Nexon, Com2US, and Devsisters. Gaming has become a global market, and Chartboost is well-served by expanding its reach into hot, developing markets, allowing its developers to buy and sell traffic on an international playing field (in localized versions of the marketplace), while cutting user acquisition expenses. That being said, it’s a competitive and bustling gaming ad market out there, with some big, well-established players in the international gaming space looking to gobble up more marketshare. With bright prospects, it will be interesting to see if it becomes an acquisition target. Chartboost raised $2 million in Series A financing in October from Translink Capital, SKTVC and XG Venture, though the team said it was already profitable in August. For more on Chartboost’s direct-deals mobile ad marketplace, check ‘em out at home here .

Today’s Women Are Decis...

I am woman and if you hear me roar, it’s probably because I’m at the overload point and there’s still grocery shopping to be done, dinner to be made and bills to be paid. Grrr. In this, I am not alone. Look at this chart from a new survey by Hearst Magazines and Fleishman-Hillard International Communications. The women surveyed. . . Well, two out of three ain’t bad. The numbers come from part four of the Women, Power and Money series of reports. This one is called “ Game-Changers: Women Defining the New American Marketplace. “ What they found overall is that women feel responsible for the well-being of their families. That need to help often extends out to their co-workers and friends of both the physical and virtual kind. In 2011, more than 50% of the women said they regularly influence purchasing decisions of friends and family. This is up from 31% in 2008. 33 percent had recommended a product or service in the past six months; while 19 percent recommended that someone not buy a specific product or service. That last part really hurts. The study shows that women are even more careful about how and where they spend their money. Much of this is due to economic stress. A full 75% of women said they shop differently than they did before the recession. 71% agreed that life is now more complex. Choosey Moms Choose. . . Being an informed shopper was important to most of the women in the study. They used the internet to research purchases and they also relied heavily on recommendations from others. 84% of millennials said they have or haven’t purchased an item based on a recommendation from a friend or family member. 51% said using social media to talk about what they’ve purchased makes them fell empowered. 66% said shopping was more of a game than a chore. When it comes to choosing a product, quality and price were the biggest factors. They also want companies to provide details about the materials used in the product, reviews from users, craftsmanship notes, and elements of design and style. The study notes that only 6% of women were interested in a company’s environmental or community impact. Guess those days are over. Now check this out: Price and quality, once again, top the list. What didn’t make the top 10? Celebrity endorsements, “tugging at the heartstrings” and a catchy jingle. See that Hallmark, we will no longer be easily led by your tissue-invoking ads, so just stop! The study, which you can view for free , covers even more ground than I’ve mentioned here. If you market specifically to women, I’d recommend you give it at least a skim. The bottom line is that women are taking charge of their spending and they won’t be swayed by flash and glitter. They want a good product at a good price and if you provide that, they’ll reward you with good word of mouth. Sounds like a win-win for everyone. Join the Marketing Pilgrim Facebook Community

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