Employees at Groupon are seen by the company logo in the company's Chicago offices © Charles Rex Arbogas

You have to tip your hat to Groupon (GRPN) CEO (and early investor) Eric Lefkofsky for engineering enough optimism among Wall Street analysts to double the company's share price this year.

That was no mean feat, given that Groupon is supposed to be a growth stock, and its revenue rose just 6 percent during the first nine months of 2013, compared to the same period a year earlier.

But after reporting a third-quarter in which its net loss widened, operating income fell and operations used -- rather than generated -- cash, the online coupon seller's fundamental position is clearly weak.

Groupon's daily-deals growth is largely played out in its most-established markets in the U.S. and Europe, and whatever growth it manages to acquire overseas will most likely widen, not narrow, its persistent losses.

The company's operating history shows that there is no real profit in the business of emailing cleverly-worded coupon pitches to online consumers.

Almost all of Groupon's cash position of $1.1 billion has come from selling stock, not from operations, and that cash position is falling (again) now that the company has swung back to operating losses.

Moreover, Lefkofsky's plan to transform the company into one whose sales are driven by Internet searches, rather than emails, faces an immovable obstacle in Google (GOOG).

The impact of the search giant on Groupon's marketing efforts was made clear by Lefkofsky on a conference call with Wall Street analysts late Thursday.

While explaining why Groupon's year-over-year revenue growth had shrunk to a rate of less than 5 percent -- just two years after its IPO -- Lefkofsky said the company had suffered from "double-digit declines in email open rates" due to a change Google made to its Gmail service during the quarter.

In other words, a few changes in the coding of Google's email application were enough to snuff out most of Groupon's revenue growth and deplete its cash position by more than 7 percent.

Now THAT'S some stiff competition, and explains why Groupon is trying to a pivot to a different marketing model, by drawing users to both its website and its mobile application.

The move has shown some promise, to be sure, as 60 million global consumers have downloaded Groupon's mobile app.

Lefkofsky said the new approach is giving Groupon users more control over when they pay for an offer, rather than forcing them to pay up front for a coupon they may not use for weeks or even months.

But as with most aspects of the company's strategy so far, what's good for Groupon users has been bad for bad for the company's bottom line. Lefkofsky admitted that the change "has put short-term pressure on our North American email business."

That's the business, you'll recall, that drove most of Groupon's initial revenue growth.

The change in direction is a step away from the very strategy that once made Groupon unique: the ability to convince online consumers to pay for something they haven't actually bought yet.

That was the biggest contributor to the company's operating leverage, and it's fading.

Now, consumers in North America and Europe have figured out that loaning money to Groupon for free, just to get a discount later from a local merchant, isn't a very attractive proposition.

That's why the company's sales rose just 4.7 percent in its most recent quarter, and why its market value is worth about half of what it was at the time of its IPO in November 2011.

Lefkofsky also said on the call that the company's growth rate was hurt by a tough comparison to last-year's third quarter, when it rolled out its revamped e-commerce business, called Groupon Goods.

"We're now (comparing) a full-year of (the new business), which is why the growth rates have decelerated," he said on the call.

In other words, after a full year of Groupon slugging it out with Amazon.com (AMZN) and Google, investors now have a true picture of the company's organic, sustainable annual growth rate.

As the company's own report shows, that rate is not in the double digits.

Lefkofsky is now trying to expand overseas, even though the company's international business has so far been a big money loser.

News that the company had agreed to acquire a Korean e-commerce company, called Ticket Monster, prompted a turnaround in Groupon shares, which had initially fallen on the earnings report.

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Investors who bought the stock on the Ticket Monster news may want to ask themselves why Groupon's main rival, LivingSocial -- in which Amazon.com has the largest stake -- wanted to sell it.

If Amazon.com CEO Jeff Bezos decided that even his low-margin business model didn't have room for it, that's not a good sign for Groupon's new Korea business.

Of course, with Amazon.com out of the way in Asia, Groupon merely need worry only about Google, which sells mobile search ads for a wide range of goods on a billion or so Android devices in that region.

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