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September 15 2011

19:03

Weather forecast: heavy clouds no rain yet? Groupon through the Glass Door

BetaBeat :: Employees of the daily deal giant have filed a class action lawsuit claiming Groupon failed to pay them millions of dollars in overtime pay. It’s another blow to an already shaky company, whose accounting is being questioned by the SEC. Groupon cancelled its IPO roadshow earlier this week.

Continue to read www.betabeat.com

August 28 2011

22:19

Henry Blodget says AllThingsD's Kara Swisher helped Groupon violate SEC quiet period

BetaBeat :: Henry Blodget is a tech blogger at Business Insider. He pointed out what he saw as a suspicious series of events. Groupon, which has filed for an IPO, has been taking a lot of heat from both the press and the SEC over its unique accounting methods. Because of the SEC’s “quiet period”, which prohibits companies who have filed for IPO from promoting themselves, Groupon cannot defend itself publicly.

[Henry Blodget, Business Insider:] The clever method Groupon is using to try to get around the SEC’s quiet period rule is writing a detailed public communication in the form of a CEO “letter to employees” that Groupon has then distributed publicly with the help of a trusted media outlet.

The media outlet in question is All Things D and the reporter is Kara Swisher.

[Kara Swisher, AllThingsD:] Henry never called me to ask how I got the email, as is his usual practice. I would not have commented I guess, but a call would have been nice before writing that out of thin air. So not sure how to respond, except that he always seems to publish nearly each and every memo I manage to get, in any case. ...

Continue to read Ben Popper, www.betabeat.com

Original piece written by Henry Blodget www.buinessinsider.com

June 02 2011

20:27

Groupon files for IPO to raise $750m ... but lost $113.9m in QI-2011

AllThingsD :: Groupon has filed for an initial public offering with the SEC seeking to raise $750 million, making it one of the largest offerings in recent memory. Proposed symbol is “GRPN,” and Morgan Stanley, Credit Suisse and Goldman Sachs are its bankers. Groupon disclosed it has 7,000 employees, 83 million subscribers across 43 countries. As the leader in the group-buying daily deals market, it said a bulk of its sales are coming from health and beauty segment and food and drink. What’s astonishing the company is not profitable on a GAAP basis, losing $389.6 million in 2010 and a $113.9 million in the first quarter 2011.

Via @holgerschmidt, @Wissenssucher

Continue to read Tricia Duryee, allthingsd.com

February 22 2010

15:00

Footnoted.org: A solo investment news site gets acquired, but its founder says the web’s no sure bet

Michelle Leder likes to joke that she is the first journalist to have been fired by email. In 1998, her editor at the Poughkeepsie Journal shot her a note to say that her job on the business desk would not be waiting for her when she returned from abroad.

Since then, she’s been a pioneer in other trends in journalism — and her outlook on the field has stayed equally dry. In 2003 she launched what has become a popular investment site, Footnoted.org. She runs posts on nuggets of interesting information pulled from the fine print of securities filings for valuable investor news. This month Morningstar purchased the site for an undisclosed sum. Leder will continue to run the editorial side and contribute content. Morningstar will sell subscriptions to her premium content (some content will remain free). And the site’s staff is already starting to grow post-acquisition; Bloomberg’s Theo Francis just announced he’s joining the staff.

The investment research firm sees value in her investigative work, particularly Leder’s ability to find useful, “actionable” information. “I think there’s been a discussion about whether information has been commoditized or not,” Morningstar’s Kunal Kapoor told me. “Some news may have been, but that’s just half the story.”

From covering acquisitions to being one

As for Leder’s story, it’s an Internet startup fairy tale of sorts: a journalist’s hobby site grows into a relevant read and a someone swoops in with a checkbook to buy the place up. Leder can hardly believe it herself. But she hesitates calling it the type of model that can be easily recreated.  She mentioned attending a recent Jeff Jarvis lecture where she thought he overstated the sustainability of an ad-only model for new blogs, and the number of bloggers who have been successful running ad-only sites, pulling in $100,000-$200,000 a year. “I just think that’s delusional.”

Leder, who has always run her site from a spare room in her house, said a startup like hers needs a safety net, in her case, it was her husband. “It obviously helps if you have a spouse or a significant other with a steady job…There were some months I made next to nothing.” Leder says the job involves no “fancy lunches” and she says if you don’t need office space, don’t get it. “Keep your expenses low. You’re going to really need that money.” In the summer of 2008, Leder hired her first (and until now only) employee, a researcher, Sonya Hubbard.

Leder launched the site as a promotional companion to her book, Financial Fineprint. “It was a way for me to continue that discussion,” Leder said of the site. The blog’s readership grew as she continued posting new content, attracting an audience ripe for advertisers, including hedge fund managers, and other investors. It was then she saw the site as a business opportunity in itself, and she turned to advertising. Soon after, she added on a syndication model, selling reprints and original content to places like the New York Times’ DealBook and Minyanville.

Trying a freemium model

In October 2008, Leder took a gamble on a new business model. “It became clear to me that advertising was never going to sustain the site,” she explained. While keeping a portion of her content free, she launched a secondary product called FootnotedPro, which contains exclusive information for investors. The 40 issues per year’s price: $100 per month, $1,000 a year or a la carte $250.

Her goal was to sign up 100 subscribers. She said that she fell just short of that, but did pretty well. (She would not disclose her exact number of subscriptions, citing an agreement with Morningstar.) ”You can’t be afraid to take that leap,” Leder said, “You need to be thinking about the business side. You’re the publisher. You have to do it.”

Still, she says she’s looking forward to letting Morningstar handle selling the subscriptions from now on. “I’m really good at reading SEC filings and finding nuggets. I’m not really good at selling subscriptions,” Leder laughed.

She hopes over the next year she’ll hire one or two more business journalists (she’s got 20 years of business journalism experience under her belt) and perhaps an analyst. ”There’s so much content out there,” Leder said. “People recognize quality.” High quality includes authenticity, which she said matters to her readers.

Her most important words of advice: ”Have a backup plan.”

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