Should Groupon CEO swig beer at work?

With all of the company's recent troubles, maybe the boss needs to grow up.

By Kim Peterson Apr 26, 2012 3:32PM
Image: Beer (© Corbis)Groupon's (GRPN) CEO chugs beer while telling his employees that the company needs to grow up. No, we're not making this up.

Andrew Mason, all of 31 years old, drank beer in a town hall meeting with employees Wednesday. He set the daily-deal site's agenda for the next six months, according to The Wall Street Journal.

It's not unusual for a tech company boss to swig beer. But during the workday, and during a town hall meeting to talk about corporate priorities? At one point, the Journal reports, his voice broke and Mason said, "Sorry, too much beer." It's all a little much, in fact.

On top of it all, the Journal secretly found a way to watch the closed-door meeting via webcast. It's the latest embarrassment for a company that has run into numerous troubles over the last year.

Groupon shares were down more than 2% Thursday to $11.99.

In Groupon's defense, the meeting was one of several informal town halls where everyone is allowed to drink beer.

I don't mean to be prude about drinking beer, but here's the thing: Groupon is desperate to convince shareholders and customers that it is a worthwhile investment. That it is professional. That it's not being run by juveniles. That it has a plan to improve and fix its problems.

Will this unplanned peek into the company's culture and strategy help?

Marketing guru Frank Reed asks the million-dollar question: "If you are looking to right a ship that is supposedly worth billions of dollars, would this report from The Wall Street Journal instill confidence that this will get better?"

Groupon still doesn't make a profit, despite generating $1.6 billion in sales last year.

If everything was going well at Groupon, the behavior might be overlooked, Reed notes. "I know that in today's anti-corporate world it may be cool to drink beer at your work place and party a bit, but that doesn't make it smart," he adds.

Groupon had to restate its revenue last month, and saw its stock plunge as investors turned skeptical. It reported a "material weakness" in financial controls and less fourth-quarter revenue than it originally stated.

Henry Blodget of Business Insider says the beer-drinking episode reflects a system-wide problem at the company.

"If you were a crew member on a ship and the captain called a ship-wide meeting to tell everyone they needed to grow up -- and delivered the message while swigging beer -- you would understand that the problem came right from the top," he writes.

Here are more details from the meeting, according to the Journal:
  • Mason described the company as "still this toddler in a grown man's body in many ways."
  • Mason said the financial restatement was "the latest in a string of just us making an example of how bad we are at being a public company. We have to get good at this."
  • He said Groupon needs to slow down and focus on fewer projects. The company should be looking at quality and control, he said, and "not taking stupid risks."
  • Mason said Groupon will hire more financial staff and instruct employees further on how to comply with Sarbanes-Oxley accounting rules.

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Tags: GRPN
29Comments
Apr 27, 2012 9:18AM
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"On top of it all, the Journal secretly found a way to view the closed-door meeting via webcast..." This is a surprise?  It's a Murdoch company.  Of course they found a way to hack into a closed-door meeting!
Apr 26, 2012 8:35PM
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what's old is new in cyberspace. This Groupon behavior mimics/echoes the same juvenile reckless abandon by start up internet companies pre & post Y2K, until the dotcom bubble burst  and so many internet companies went under. I worked for one such company where they broke out the beer at 3 pm at the latest every afternoon. I called on internet/tech companies where the 20 something CEO's would greet me at the elevator on a foot scooter. Groupon is no different and they will crash and burn along with livingsocial and the other "social media sites" - which are neither social nor media. I swear it's 1999 again with junk sites like this one.
Apr 27, 2012 10:29AM
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Fraud on wall street? Who woulda thunk it? C'mon, wall street is all about dirty dealings. Get real.
Apr 26, 2012 6:16PM
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What's the problem? Alcohol makes everybody smarter.
Apr 27, 2012 12:20PM
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Why would anyone invest their money in these phony IPOs when their are so many great established companies out there? IPO's are rigged on favor of company insiders and investment bankers - who doesn't understand that ?
Apr 27, 2012 8:53AM
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I think Groupon is doomed.  When they first came out I thought it was great.  It introduced me to lots of local businesses that I hadn't heard of before.  But as the months went on it seemed like the deals got very repetitive, it was the same few businesses over and over.  Not to mention with the addition of Groupon Goods and the travel deals and everything, I was getting up to 4 emails a day from them.  I got sick of it and cancelled my subscription.
Apr 26, 2012 8:10PM
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When Groupon had the chance to be bought by Google for $6 billion in November 2010 I thought to myself what a big mistake that was.  I really believe this will come back to haunt Groupon.  The sales model is just too easy to duplicate and come on, I'm already tired of it.  Stuff to purchase enters my email Inbox that I would never dream of buying.  Maybe I'm missing something but I don't think so.

Here is a link to the story at that time:
http://www.bloomberg.com/news/2010-11-30/google-said-to-near-agreement-to-buy-groupon-for-6-billion.html
Apr 27, 2012 10:10AM
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The one thing that everyone is keying on is the beer comment. The real issue here is that is a fraud has been committed. Groupon has never been in the black from day one. They have never made a profit. They pulled the wool over the SECs eyes and that's a huge no no. That will be their demise. Basically they had big money backing an unsustainable business plan. Big money pumping money into this dog with fleas so that they could rip off the common idiot when they went public. That they did big time and NOW everyones up in arms. The street said it was a $10 stock and I think that's a bit high.They have an IPO, the backers take their profits, the people who think it's the internet so it must be good get screwed and now they moan. Groupon will be out of business by the end of the summer or at best a penny stock. The SEC is going to come down on them hard and they don't care. They made their money and then some when they went public. It's a little late to cry when you don't do your homework. Take your lumps, dump it before the SEC steps in and quit whinning about some beer comment. It's way beyond that. Groupon's finished and Andrew Mason does not care. He made his money. His little beer comment is just going to make it a little harder to squeeze a little more money out of this farce. Watch what transpires over the next month and then think about what I wrote.

Apr 26, 2012 5:56PM
Apr 26, 2012 6:30PM
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I'd expect this at a Chucky Cheese restaurant meeting, aimed at the jr.high school mentality.
Apr 27, 2012 10:54AM
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You'll get no argument from me. What I'm saying is that keying on a beer statement shows the stupidity of the people who are crying about their lost money. Wall Street is as filthy as an outhouse. The SEC should have never let this happen but since they did and will continue to do so, now they will clean up the outhouse a little. It will be filthy again in no time. Right now the stock is down 2.5% in 1.5 hours. How long will Groupon last? That's as real as it gets.
Apr 27, 2012 3:22PM
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uh...so drinking a glass of bourbon at work isn't OK either?

Tell that to the lawyers and CEO's of the world.

Article is ricokulous

Apr 26, 2012 5:20PM
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They're doomed with the current mgmt structure.

[funny when the site spam filter won't let you say the name of the company that's the topic of the fargin' article!!?]

Apr 26, 2012 6:58PM
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All of you going "chill out, have a beer, it's cool" didn't see the 60 minutes where Groupon's CEO was featured. The problems they would have were clear from this episode (overspending on writers). Their model has been mimicked so much now, aside from format the company has no advantage. Plus, the excessive segmenting of their products (Groupon Goods, Groupon now) is just contributing to more customer confusion and clutter.
Should have spent less on editing and marketing, more on accounting.  
Apr 26, 2012 4:36PM
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Good idea for a website, but it will never make any real money...
Apr 27, 2012 5:00PM
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So you snuck in to a private meeting where everyone was free to drink beer and complain that the CEO was partaking? Real great journalism there
Apr 27, 2012 12:05PM
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LMAO.....Good one I told you so......."as filthy as an outhouse"...sums it up quite well.
Apr 27, 2012 5:26PM
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Lets get off of this uptight, American prudishness and realize that having a beer has nothing int he world to do with how professional a company is.  When are we ever going to grow out of this puritanical and uptight moralism in this country?  
Apr 27, 2012 8:04AM
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Need to cope with that funky accounting system.
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