March 23, 2011, 10:57 AM

Groupon’s president steps down

Rob Solomon leaves the daily deal site after a little more than a year.

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Rob Solomon

Daily deal leader Groupon says that its president and chief operating officer Rob Solomon will leave the company in the coming months. He will remain as an advisor to the company.

Groupon gave no specific reason for Solomon’s departure. “Rob Solomon joined Groupon just over a year ago, doing what he once considered unimaginable and relocating his family from ‘God’s Country’ in Woodside, CA, to Chicago, bringing his experience as a seasoned Internet executive to help us turn Groupon into the next great technology company,” wrote CEO Andrew Mason in an e-mail. “Now, Rob is moving on, taking his family back to God’s Country.”

Solomon has worked at Groupon for a little more than a year. In that time, however, the company grew from roughly 200 employees to about 6,500 as it evolved from an exclusively U.S.-only operation to having sites in 44 countries.

"In the course of a year Groupon grew massively and got nearly a billion dollars in investment capital," says Greg Sterling, an analyst and the founder of Sterling Market Intelligence. "Those are things that would be huge wins under any circumstance. You’d have to see his tenure as a success."

Finding a replacement for Solomon will be difficult as the company needs to find an executive with a unique skill set, says Lou Kerner, vice president of equity research at Wedbush Securities.

“They need to find someone with world-class management skills who can execute everything they are trying to do,” he says. “They are in a massive land grab. They need to integrate their acquisitions. They need to organize their sales force. They need to upgrade their technology.”

The move comes as the daily deal site faces increased competition from its largest competitor, LivingSocial, as well as Internet giants such as Facebook and Google.

While Groupon is the market leader for daily deals, according to web measurement firm Experian Hitwise, that could change as the online daily-deal industry grows. Online daily deals could generate up to $6.1 billion in sales in the U.S. alone by 2015, according to a recent report by media research and consulting firm BIA/Kelsey, further develops.

LivingSocial earlier this month began testing Instant Deals, a feature within in its mobile app that lets users search for deals within a half-mile radius of their current location. Facebook also made a move this month with plans to expand the reach of its Deals program to offer exclusive online daily deals.

Those moves, as well as several others, increase the pressure on Groupon to bolster its technology infrastructure to make its business more social, mobile and location-based, says Kerner. “Those are the battlefronts where this war will be won and lost, and right now Groupon has very little presence there,” he says.

Location-based daily deals are not just about where a consumer is at a particular moment, but rather where the consumer will be in the future, says Kerner. If a daily deal site can tie into a consumer’s calendar to know, for instance, that he has an appointment for lunch at a restaurant three blocks from his office, then the company could offer a deal for a retailer on the way, as well as for a coffee shop nearby where his friend will be after the meal. “If one of these companies could figure how to do that that would be very enticing,” he says.

David Fisch, director of business development at Facebook, will speak at the Internet Retailer Conference & Exhibition 2011 in a session entitled “What e-retailers need to know about Facebook."

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