Maybe any publicity isn't good publicity after all. Groupon is planning to significantly reduce online marketing spendingas the tactic isn't yielding many profitable results.
The move was explained on Friday in the daily deal giant's latest amendment to its initial public offering filing with the U.S. Securities and Exchange Commission, which it originally filed back in June. Groupon was planning to raise $750 million in funding.
Ever since then, it's been shaky for Groupon, especially after the Chicago-based company glossed over some unusual accounting methods to the SEC. That's most evident based on the addition of an internal memo from CEO Andrew D. Mason to his employees dated on August 25.
You can read the entire email at the bottom of the latest copy of the SEC filing, but here's an excerpt:
This weekend, I did a Google News search on our company—my first in awhile. The first story that popped up was called The Fall of Groupon: Is the Daily Deals Site Running Out of Cash? I laughed when I read the headline (in the car by myself, weirdly). First—with this article, the degree to which we're getting the s*** kicked out of us in the press had finally crossed the threshold from "annoying" to "hilarious."
Thus, perhaps it's better for Groupon to regroup and figure out some other kind of publicity strategy from here. Otherwise, it's opening the door for the competition to step in and attract their customers and investors who might be jaded with Groupon already.
Speaking of the competition, LivingSocial has issued just under $143 million in stock, although the recipient was not specified in the SEC filing, issued on Thursday.
TechCrunch speculates that the money is tied to LivingSocial's bid for TicketMonster, which it acquired in August. At the time, financial details were not disclosed. However, the merger does beef up LivingSocial's existing worldwide presence -- particularly in Asia -- significantly.