Groupon’s 2-for-1 CEO deal: Groupon, decidedly the most non-tech company pretending to be a tech company fired Andrew Mason, founder & CEO, and replaced him with not one but two CEOs — Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis, who are taking over as co-CEOs. Not to poop on their parade, but weren’t these two gentlemen supposed to prevent the current state of chaos at the company as board members? Something stinks, and it is not kielbasa. In what seems to be a perfect exit interview, Mason had some choice things to say:

“I think in the first phase of our company, we were a glorified mailing list. We had a completely unintelligent email that we sent out once a day and we had a human sales force that was going around and procuring the deals.”

As for Mason, he is looking for a fat farm to lose what he adorably calls “Groupon 40.” I am going to miss his nonsensical utterances.

Everybody hates (or loves) Marissa Mayer & loves(or hates) Sheryl Sandberg: Well, at least everyone in media has something to say about two of the brightest and more powerful women in Silicon Valley, Marissa Mayer and Sheryl Sandberg. They were both making headlines this week for what seems to be all the wrong (or right) reasons.

Mayer wants her remote-working Yahoos to come back to the office, and while some claimed that this was the worst decision possible for the company (and its working parents), others argue that maybe we could all use more separation between work and life. Even we couldn’t decide with Mayer’s idea that the best ideas come from “hallway and cafeteria collaboration,” the fact remains — people are talking about Yahoo again.

Hoping to recreate a Betty Friedian-like social movement empowering women in the workplace, Sheryl Sandberg’s individualized take on feminism outlined in her new book, Lean In, may not strike the cord she had hoped. In fact, prominent entrepreneurial women have denounced the cause as unrealistic, while others insist that men must also become passionate change agents  in order for the business world to become more balanced.

By the way, those two news items sparked a lively thread on our internal messaging system.

Technology’s worst dressed guy is emasculated by phones: Google co-founder Sergey Brin, who is not exactly Bernard Arnault (CEO of LVMH, if you must ask), feels that smartphones are “emasculating.” He was speaking at the TED conference and his comments resulted in a flurry of commentary around gender issues.

The general body language of your average smartphone user aside, his comments indicate that Glass could evolve to include cellular phone service, but the truth is that health concerns might hinder adoption by the masses. One thing that might help make Google Glass cool? Its rumored partnership with hipster darling Warby Parker. But those are minor issues, as author Mark Hurst rightfully argues. The real issue is how we as human beings will interact with people with Google glasses and how that will change our daily experiences, he said.

“Google Glass is like one camera car for each of the thousands, possibly millions, of people who will wear the device – every single day, everywhere they go – on sidewalks, into restaurants, up elevators, around your office, into your home. From now on, starting today, anywhere you go within range of a Google Glass device, everything you do could be recorded and uploaded to Google’s cloud, and stored there for the rest of your life. You won’t know if you’re being recorded or not; and even if you do, you’ll have no way to stop it. And that, my friends, is the experience that Google Glass creates. That is the experience we should be thinking about. The most important Google Glass experience is not the user experience – it’s the experience of everyone else. The experience of being a citizen, in public, is about to change.” [Mark Hurst]

Does that future scare you? Then you should read Joel Hladeck’s amusing letter from the future that talks about why Google glasses kinda went the way of AltaVista.

Getty Images

Oscars & Hard times at CGI Corral: Darlings of the big screen and red carpet took home their golden statues at the Oscars last Sunday, but not all is well for the behind-the-scenes crew. The visual effects industry is facing hard times due to foreign outsourcing and subsidies, with large and small studios alike facing layoffs and closures. You may have caught Bill Westenhofer attempting to broach the subject after winning the Academy Award for Best Visual Effects for Life of Pi before being ushered off the stage to the theme of Jaws, which now seems oddly appropriate given that thousands of jobs are dead in the water.

Talking about Oscars, congrats to PopSugar for launching PopSugar Live. Their live red carpet show from the Oscars got about a million views, putting them in the cable television territory. Who needs cable (TV) when you have broadband?

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Fashion and tech in one place! What could go wrong: Conde Nast rolled out the red carpet for geeks during this years’ New York Mercedes-Benz Fashion Week by hosting a first-of-its-kind fashion and tech hackathon to create new ideas around how to use technology in the industry. We do admit that does sound kinda crazy and, well, Conde Nast isn’t who we turn to for innovation tips. But then again, the fashion industry is so far behind that they need to start somewhere. We would also recommend watching out for a whole new breed of fashion media upstarts that are frankly more fun and engaging than perusing dowdy Conde Nast.

Beyond Fashion Week, a handful of forward-thinking companies are already capitalizing on the use of technology in fashion, and creating a brand new way to shop, and find the perfect fit online

It is now the Internet of things:

“We are beginning to learn what it is like to use the Internet to communicate with things that are not humans.” — Vint Cerf at TED2013 (via Twitter)

We at GigaOM have been on it for a while, writing about the topic for a few years now. But now we are taking the show on the road and are hosting a series of meetups like the most recent one in San Francisco and the next one in Boulder, Colorado. Our belief: Ideally, the internet of things should fade into the background; what matters is what it allows people to do.

And what here are some stories from this week you might have missed.

1. Battle of the campuses: Google told Vanity Fair that it would soon be breaking ground on a new 1.1-million square foot campus, and it’s quite the contrast from Apple’s upcoming futuristic spaceship-like HQ coming in 2016. Richie King at Quartz explored what these vastly opposing architectural footprints say about the personality of each company.
2. Jimmy Iovine needs to make up his mind: He can’t undermine music curation without undermining Music by Beats, the company he owns and will disown soon.
3. Microsoft wants to be cool: And it will never be cool, according to a former Apple guy and a former Microsoft guy.
4. Tim Cook & Apple versus Wall Street: The New Yorker’s John Cassidy rightfully argued that we shouldn’t pity the hedgies.
5. The problem with Facebook data: Well, there is a lot to dislike about Facebook’s “Like” argued Alan Wolk.

Read this and other in-depth articles on GigaOM’s Flipboard channel

Back in August, Om wrote that the problem with Groupon was that it was highly valued by investors who were hoping to get in on the big deals of the social web around the time of the company’s IPO, but that Groupon was never a technology company; even if it was valued like one. For the most part, it’s really more of an online coupon business, yet it enjoyed a whirlwind IPO and was reportedly once courted by Google to the tune of $6 billion.

Groupon’s statement:

“Groupon, the global leader in local commerce, today announced a leadership change in which Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis have been appointed to the newly created Office of the Chief Executive, effective immediately, replacing Andrew Mason. Lefkofsky and Leonsis will serve in this role on an interim basis. The Board has commenced a search for a new Chief Executive.”

Groupon went public in November 2011 at in initial $20 public offering, making it the biggest U.S. public web IPO at the time since Google. But Groupon’s stock price is down 77 percent since that IPO, as it has struggled to expand and as both customers and small businesses — the fuel for Groupon’s early rocket ship — have grown weary of the daily deals business.

GRPN data by YCharts

The company’s stock closed Thursday down 24 percent following that dreadful earnings announcement, but rose 3 percent after hours on news of Mason’s departure. He has been with the company since November 2008.

Mason wrote in a blog post why he will be exiting the company. The entirely of the post follows below:

(This is for Groupon employees, but I’m posting it publicly since it will leak anyway)

People of Groupon,

After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love,

Andrew

This piece was updated continuously on Thursday as the story developed.

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AllThingsD and other media outlets reported Tuesday that “discussions about Mason’s tenure as CEO have increased as its stock has dropped precipitously. That has prompted its directors and management to seek to find a way to get the company on more stable footing as a business and, perhaps more importantly, with investors.”

“News flash: Our stock is down about 80 percent since we IPO’d a year ago,” Mason said. “It would be weird if the board wasn’t discussing whether I’m the right guy to do the job… the only thing unusual is that it’s showing up in the newspapers.”

But Mason claims “Groupon’s a special kind of company. When you’re creating a new category, there’s going to be bumps along the road and things that can’t be predicted.” The company is “unlock[ing] local commerce and plug[ging] it into the web,” Mason said. “I’ve seen Groupon crush the most seasoned professionals. What Groupon needs from the CEO role is consistent leadership.”

Groupon had two big surprises in the past year, Mason said. The first one was that “the performance of the international business has been in steady decline. That’s been a major impediment on the growth and an obfuscator in the story of Groupon.” He described it as “a tale of two businesses.”

The second surprise was the popularity of goods. “We’ll run a deal for a Garmin GPS device and sell 30,000 in eight hours. There’s never been an outlet for something like that,” Mason claimed — though many other companies, like Amazon (which owns Groupon competitor LivingSocial), run flash deals on goods. The company is “absolutely not” building out an Amazon-like service with fulfillment and shipping. “The way we think of goods is a way to strengthen that core, daily deals value proposition.”

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Over the weekend, The New York Times columnist James Stewart blamed network effects going into reverse for the declining fortunes of the new web companies, though I don’t think his argument applies to Groupon, which has its own unique set of challenges and isn’t in the same class of companies as Facebook. Today, Wall Street Journal reports that investors like Kleiner Perkins and T. Rowe Price have taken it on the chin with their Groupon investment, but for now they remain believers in Andrew Mason and rest of the team.

The Groupon debacle is particularly telling about Silicon Valley and investors. Why? Because I don’t think it belongs in same category as Facebook and even Zynga. I am not sure it even belongs in the basket of technology stocks. Let me explain:

Some deals are too good to be true

From the day it emerged out of anonymity, Groupon was hailed as the messiah of local commerce, a company that was going to revolutionize retail and advertising. I tried very hard to understand the company and figure out its technology edge. When I saw Groupon, I saw a company that was essentially using e-mails to conduct what was essentially a coupon-clipper business. (Even Groupon Goods, the new discount goods service, reminds me of QVC more than anything else.)

Nevertheless, the company kept getting valued at nosebleed valuations by private investors. Some of the smartest people on the planet were extolling virtues of the company. Google offered to buy if for $6 billion. Maybe I was too old fashioned to label the company as a “technology company.” So, I abstained from writing and tuned out GroupOn. That didn’t stop the company from going public and getting valued at around $12.8 billion, making it the biggest U.S. web IPO since Google. Nothing really changed after the IPO. The more time went by, the more evident it became, at least to me, that Groupon was no technology company. That is the most crucial point of the Groupon saga.

The momentum players

Of course, the problem with Groupon is not entirely of its making. In order for a company like Groupon to get valuations befitting a high-growth technology company instead of a coupon-clipper business, there need to be compliant and willing investors. Many have their own personal compulsions. Kleiner Perkins, having lost its shirt on clean tech and energy investments, decided to double down on social and web investments — price be damned. No one can fault them trying to remake their franchise, which as PE Hub’s Connie Loizos pointed out has been under attack from Marc Andreessen’s investment outfit, A16z.

Other late-stage investors in the company felt the heat from late stage investor DST Global, a relatively new and aggressive investor with faint regard for valuation. For others, it was merely a way to play the momentum, make a quick buck and show a win, so that they can go on and raise yet another big fund.

And then there are the likes of T.Rowe Price, a giant mutual fund that was hoping that it could get a piece of these fast growers and make a killing at the IPO. Well, that plan didn’t work out, but they are still holding onto the stock. [By the way, it is the same fund that bought into Slide at a rumored $500 million valuation. Slide was sold to Google for $250 million.]

Many of these late-stage investors were trying to time the market. And as someone really smart once said — you can’t really time the market. More importantly, it doesn’t matter who you are or how fast you grow, at some point in time companies — both big and small — have to grow into their valuation. Groupon’s late stage investors are living through that harsh reality.

If it quacks like a duck….

Photo of Ducks by Daniel Alvarez via ShutterStock

Groupon isn’t the only company that uses technology but isn’t really a technology company, nonetheless enjoying investors’ decision to value it as a technology company. Just because a company uses the web and uses social networks (instead of real estate and old media) to sell things and find new audiences doesn’t mean that it should be put in the same bucket as, say, a company offering storage services to large companies, or even running world’s biggest social identity platform.

Andreessen once famously said that software will eat everything. I totally agree — but that also means that the software should make things more efficient. That makes the companies that are using software to replace the physical infrastructure (and its limitations) more profitable.

Yes, the Internet, mobile devices and social networks make it easy for these companies to grow their businesses — really really fast — but at the end of the day, if you are selling shoes, you are selling shoes. If anything, the higher growth, efficiency of infrastructure and ability to narrowly and rightfully target your customers should mean that you as a business should have higher margins than a competitive retailer. And if you do, then you should be valued higher than an offline competitor.

However, we continue to see the online-equivalents of retailers and fashion brands being accorded valuations typically reserved for high-growth technology companies. How is a company selling subscription for shoes or underwear a technology company? Many of these online companies might seem special because of there new models, but in the end they aren’t. Like ShoeDazzle that started the whole retail-as-a-subscription madness and is now selling discounted shoes, Groupon is a rude reminder of that reality.

The fact is that the very idea of what is a technology company is starting to morph. The traditional tools of valuing technology startups might not be applicable to companies like Groupon, which are like shooting stars – they grow fast and they fade faster. It means, the venture investors have to go back to the drawing board and figure out how to value the online equivalents of old-line businesses.

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A second director, Accel Partners’ Kevin Efrusy, won’t stand for re-election at the company’s Jun 19 board meeting. As the board rep from a key investor, usually someone like Efrusy would be replaced by another member of his firm. Instead, his slotted successor is Robert Bass, a vice chairman of Deloitte LLP, now nominated for election at the annual meeting. (The changes were reported first by AllThingsD, then confirmed by Groupon.)

But Groupon’s lightning-rod-in-chief –CEO Andrew Mason — isn’t going anywhere. Yet. Mason, the co-founder and one of the largest individual Groupon shareholders, has been criticized for his eccentric management style, which could be forgiven or at least overlooked when he was delivering results.

Investors get a lot less forgiving when growth is in question and you have to restate your first public quarter’s results, especially if accounting methods aren’t the norm. Groupon is being sued by shareholders and may face an SEC investigation .

Howard Schultz is no financial slouch but he’s not a finance guy. Replacing him with the CFO of a major company who speaks fluent transactional and e-commerce adds a kind of financial gravitas. Henry and Bass aren’t investors on a board; they’re experts in managing corporate finance — and doing it in the spotlight of a public company.

Both new directors will join the audit committee chaired by early-in Groupon investor Ted Leonsis. Leonsis also serves on a corporate board that oversees one of the new directors: he joined the AmEx board in 2010 following the credit card giant’s acquisition of Revolution Money. At AmEx, he heads the Innovation and Technology Committee.

As for Mason, I don’t know what it would take to remove him as CEO — or for him to step away voluntarily — but that would be a logical next step if this move doesn’t help the company find more secure financial footing.

The stock dropped 10 percent in late trading to $10.71, continuing a sharp downward trend since the restatement.

GRPN data by YCharts

Thumbnail image courtesy of Shutterstock user [Monkey Business Images].

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The latest complaint is a so-called “derivative suit” in which shareholders seek to stand in Groupon’s shoes and enforce the company’s rights against CEO Andrew Mason and other executives.

This is different from an earlier suit in which shareholders are seeking fraud damages based on Groupon’s alleged violation of the Securities and Exchanges Act.

Shareholders are upset over Groupon’s admission in an SEC filing of “material weakness” in its controls. In practice, this meant that the company pulled an accounting fast one over its refund policies — this in turn may have led people to buy Groupon shares at artificially high prices.

The derivative suit not only accuses the executives of abuse of control and breach of duty. It also seeks to shake up  Groupon’s corporate governance, in part by letting shareholders nominate at least three candidates for the Board.

The success of the case will depend on the plaintiffs’ ability to show that it’s “futile” to expect the company’s existing leadership to take action themselves.

The lawsuit says “futility” exists because many executives are longtime friends who will not bring a lawsuit against each other. It also says the executives won’t sue because that would forfeit their directors and officers insurance.

Groupon has gained a reputation as the enfant terrible of the IPO world by racking up a series of legal and accounting scandals in its short life. At least four suits have already been filed over the latest scandal.

Here’s a copy of the derivative suit:

Groupon Derivative Suit Copy

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The idea of creating copycat businesses is almost universally derided, whether it’s a small company ripping off a larger one — for example ,when design sales site Fab.com this week called out German clone Bamarang — or a big business lifting ideas from smaller rivals, such as when Zynga found itself hauled over the coals for creating its own version of the indy game Tiny Tower.

It’s obvious why clones are so disliked. After all, for an industry that prides itself on novelty and invention, copycats seem to display two cardinal sins: a lack of ambition and imagination.

Yet despite this apparent consensus, copying the ideas of others remains a very successful business — particularly in Europe. In the old world, barely a week goes by without a new company arriving that appears to copy a foreign rival. In fact, Berlin-based Rocket Internet has made so many millions by cloning the likes of eBay, Groupon and Zappos, that its founders, the three Samwer brothers, have become synonymous with copycatting.

But however people feel about cloned companies, they continue to exist. So what can businesses do to beat them?

Think global, not local

German entrepreneur Lars Hinrichs has experienced life on both sides of the aisle. As the founder of professional social network Xing, he faced accusations of copying LinkedIn, but today, his startup accelerator HackFWD focuses on investing in innovative European technology businesses.

He thinks copycats are inevitable.

“Yes, all successful products will be copied,” he says. “Since it is so easy to copy the front end, it’s logical to copy. And unfortunately it is a working business model.”

The answer, he thinks, is to dream big. Clones often spring up in international markets where the progenitor company is unwilling or unable to deliver. This means there’s one simple answer to the copycat dilemma.

“Immediately think and act global,” says Hinrichs. That can be tough, however, and requires funding that may be hard to come by. “Since the Sarbanes-Oxley Act, many U.S. companies don’t get enough public cash to manage to scale globally in the beginning. They only overcome this burden with massive A and B rounds.”

A more common option is to partner with or acquire clones. Obviously, this is something that goes against many entrepreneurs’ gut instinct: After all, if cloning is seen as a form of blackmail, then acquisition means a company has effectively paid ransom. But on a practical level, paying to take a clone out of the game can be worthwhile if the strategic cost of competing directly is too high.

Oded Shenkar, a professor at the Fisher College of Business at Ohio State University, says this is important because acting too late or too indecisively can sometimes let the copycat gain the upper hand.

“Look at Ali Baba. It started in China as an imitation of Yahoo,” he says. “Now it’s in a position to buy the company it was imitating.”

‘Innovation is a sacred cow’

Shenkar’s views on cloned businesses don’t stop there. The author of Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge says copying isn’t just inevitable; it’s everywhere already, even if we pretend otherwise.

“The stigma about copying is strong in the Western world,” he says. “We talk about innovation all the time; people are bombarded with it. There’s a disbelief when you say ‘let’s take a contrarian perspective for a moment’… Executives get personally insulted if you suggest they have imitated somebody else.”

According to Shenkar, we are culturally programmed to forget that ideas are rarely unique, and radical new business models few and far between.

“It’s especially challenging in the technology industry, because all of it builds on innovation — innovation is even more of a sacred cow than in other businesses… People are happy to believe that supermarkets will imitate each other, but god forbid if the same happens in our prized high tech industry.”

History is written by the victors, making it easy to forget there were social networks before Facebook, search engines before Google and discount sales websites long before Groupon was ever a twinkle in Andrew Mason’s eye. Would Google’s Android work the way it does if it hadn’t been for the iPhone? And would Apple have made the Mac if it wasn’t for Xerox PARC?

As Steven Johnson argued eloquently in his book Where Good Ideas Come From, groundbreaking innovation is rarely groundbreaking, and it’s rarely innovative. Instead, it’s the product of a time and place and context.

The stack of ideas

Perhaps the most essential way to beat clones, then, is to realize that ideas are far less valuable than execution. This shouldn’t be an alien concept to technology businesses; after all, engineers are used to standing on each others’ shoulders and using the same software stack but competing on implementation. So why not stretch that way of thinking through to the stack of ideas?

This is where Germany’s Samwer brothers are not ignorant, but cunning: Their speciality is the rapid execution of businesses that require some sort of physical infrastructure. They could build a clone of eBay in Germany because eBay wasn’t bothered, and they used that expertise to execute copies of Zappos, Groupon, Airbnb and others. To Shenkar, this makes them very smart indeed — because they copy what they need and compete where they can: that is where they are innovative.

Perhaps, he says, if we spent less time complaining about copycats and more time outperforming them, we might all be better off.

“Most fundamental innovations in our history — from the wheel to the compass to writing systems — have only been invented once, maybe twice,” he says. “It’s not only arrogant but dumb to think that only one company or one country can innovate.”

Update: A representative of Alibaba.com got in touch to voice concern about Professor Shenkar’s characterization of the company as a business that “started in China as an imitation of Yahoo”. While the company’s core marketplace business may not have been a clone of Yahoo’s — and it later joined forces with Yahoo in a joint venture — its early designs and approach to the web were highly reminiscent of the American company. According to Prof Shenkar: “They may not like the copycat label (almost nobody does) but in my mind they are a clever copycat who, like may other copycats, did better than the original, also by diversifying quickly into promising areas identified by other pioneers — Amazon and Ebay. This is what clever copycats do — they often borrow from multiple models.”

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It’s not unheard of for senior execs to do a reverse once they find out the grass isn’t greener or allergy free. But it’s never a good sign when you lose two COOs in a month. Going back to Google as president of the Americas is one thing; doing that instead of sticking with a company on the verge of an IPO and what would usually be seen as a big payday, can send a very different message, no matter how nicely it’s worded.

Then add in this — CEO Andrew Mason, criticized for the way he has handled the company in recent months, is taking over most of the COO role himself. Here’s how he explained it:

We’ve built a fantastic team that has proven itself highly capable, so this change won’t have an impact on operations. In fact, we are using it as an opportunity to reorganize in a way that reflects our evolving strategic priorities. Sales, Channels, International, and Marketing will now report directly to me.

Here’s a note from Margo: “Groupon is a great company and I feel privileged to have worked there even for a short time. It was a hard decision to leave as the company is on a terrific path. I have complete confidence in the team’s ability to realize its mission.” We wish her well.

But the biggest hit comes from the revenue restatement in an amended S-1/A filed with the SEC Friday afternoon, according to a report from AllThingsD. That follows a canceled road show and other missteps surrounding the IPO, including controversy over a leaked memo by Mason.

It’s safe to say quite a bit of the luster on Groupon has worn off over the past couple of months, which has also dovetailed with a rough patch for the stock market in general. The company still hopes to go public in October, according to reports from last week, and it posted a 36 percent in revenue during its last quarter under the old method of counting the money.

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The memo, first reported by AllThingsD, was written by Andrew Mason, Groupon’s co-founder and CEO.

Although the company is in a quiet period leading up to the IPO, Mason writes that he was motivated to compose the memo when his threshold for bad Groupon press went from “negative” to “hilarious”, after reading an article about the company questioning its cash position. “I’ve never been more confident and excited about the future of our business,” he wrote to counter that claim.

But this is no ordinary, short staff memo rallying tired workers’ spirits and inviting them to a company barbecue. It runs to nearly 2,500 words and feels more like a well-thought out defense of the company, covering areas like accounting practices; revenue projections (12 percent growth expected this month over last month); and even an explanation of why Groupon is spending 20 percent of its revenue at the moment on marketing.

(That last bit is particularly messy — even Mason admits that his explanation is difficult to understand. Only time will prove if it’s a lot of puffery or a significant and new approach to how to grow and then maintain marketing businesses.)

Given the quiet period rules, WSJ points out that the “leaked” letter may well have been a simple and indirect route to bigging up the company at a time when it isn’t allowed to speak about itself publicly, for fear of influencing its IPO, even as others are allowed to say whatever they want to about the company:

“While we’ve bitten our tongues and allowed insane accusations…to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off,” he tells his staff — and maybe the rest of us would-be investors, too.

The negative press, however, does appear to keep coming. Just today, Experian Hitwise released its latest figures assessing traffic going to Groupon and its biggest competitor, LivingSocial.

Notably, it says that Groupon traffic as of last week has dropped off by nearly 50 percent since its peak in June 2011, while LivingSocial saw growth of 27 percent during the same period. But overall, the daily deal / aggregator category of sites had 25 percent fewer visits in that period. (These numbers cover web-only traffic and do not include mobile or app-specific traffic, the researchers note.)

One thing that Mason doesn’t touch on in his memo is the quality of the service that Groupon is offering. Hitwise says that a survey of users in June found that while 44 percent said they use daily deal websites, 52 percent said they felt overwhelmed by the number of bargain-boasting emails they receive on a daily basis. Hitwise further suggests that the more recent drop-off in usage is the result of “deal fatigue” and/or a lack of relevant deals.

Appropriately enough, the Groupon memo came to light on the same day that one of Groupon’s competing services, Facebook Deals, was canned by Facebook — no specific reason given for the cancellation, but it’s not the brightest message to give out for the daily deals sector, either.

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