Groupon have announced that they sustained a loss over the financial year ending December 2011. The earning calls, made by Groupon CEO Andrew Mason and CFO Jason Childs, indicated that over the last quarter, Groupon had incurred a loss of $43 million even though overall revenues shot up by an impressive 194% from $172.2 million in 2010 to current levels of $506.5 million over the last year.
This revenue increase is attributable to the fact that Groupon has been working hard to diversify its product offering as the daily deals rush fades away. In the run up to the company’s IPO, many analysts and experts criticized the company for what they called a weak business model based almost entirely on a passing fad.
In some ways, these harbingers have been proven true in the sense that daily deals have cooled off and many, if not most, of daily deals sites have shut down or been sold off to larger companies.
Groupon has been a beneficiary in this market shift as it has taken advantage of the small-fish calamity and snapped up quite a few of these startups.
Notable purchases include Adku, which the company purchased only last week and which brings along high engineering pedigree in the area of e-commerce big data analysis and social group buying startup Mertado.
CEO Mason attributes these acquisitions to the fact that the company is leaning more heavily on technology to deliver value than it did previously on marketing efforts.
It will be remembered that Groupon had disproportionately large marketing overheads that were 100% of operating costs but this has been lowered significantly to just below 30% as the company seeks for better and more efficient methods of making money.
It is not yet clear what long-term plan the group buying site will employ but CEO Mason has alluded to the fact that they have a secret project they are working on and which they will be rolling out in the near future.