Groupon says goodbye to COO after just five months, changes IPO documents yet again

Group buying giant Groupon has caused another stir after announcing its chief operating office would be returning to her former employer Google after just five months in the job and just weeks before the company is tipped to float.

And potential investors have been made even more nervous by yet more changes to the company’s pre-IPO filings. The latest amendment slashes the company’s slated revenue for 2010 to $312.9 million, down from $713.4 million. The move was made to reflect commission on sales, rather than counting revenue as the total value of a coupon.

It is yet another change to the pre-IPO filings, with reports suggesting the Securities and Exchange Commission has been breathing down Groupon’s neck over some of its language and accounting measures.

However, Telsyte senior research manager Sam Yip says the recent changes shouldn’t be taken as an indication that Groupon’s star is fading.

“I don’t believe this is a reflection of the company’s performance,” he says, noting that many executives switch jobs in the tech industry as salaries become more competitive.

Chief executive Andrew Mason said in a blog post last week that Margo Georgiadis had resigned, and would be returning to Google.

“As a fast-growing company, we’ve done a lot of hiring this year, including on our senior executive team,” he says.

“Since the beginning of this year, we’ve made a total of eight additions – that’s 57% of the total executive team. It would have been great if I could say that we batted 1,000%, but that’s rarely the case.”

Mason also said the opportunity would be used to restructure its internal reporting methods, with sales, channels, international and marketing reporting directly to Mason.

Yip says the departure is not out of the ordinary, saying “it is expected among fast growing internet companies such as these, with many people jumping out at opportunities”.

However, some analysts have expressed concern over the fact Groupon has made yet another amendment to its filing.

Earlier this year the SEC reportedly pressured the company to amend references to an accounting method called adjusted consolidated segment operating income, while it also informed potential investors to ignore comments made by a co-founder that the company would be “wildly profitable”.

While Yip says the recent announcements may put some investors on edge, “they do need to think about how much money is made and how sustainable the business is, regardless of COO”.

“How much the group buying industry can succeed is not tied to this one business. It’s a real industry and a new marketing practice.”

Meanwhile in the tech IPO space, concerns have been raised over social gaming company Zynga. Its most recent filing shows the company’s quarterly profit has plummeted 95%.

Both Groupon and Zynga were rumoured to be considering delaying their IPOs due to market volatility, although Groupon is expected to list before the end of the year.