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Groupon Restates Financials; COO Goes

Groupon has changed the way it presents its revenue, slashing its top-line sales figure by more than half ahead of a much-anticipated initial public offering.

The online coupon seller cut its 2010 sales from $713 million to $313 million after subtracting the fees paid by merchants, it revealed in a securities filing late on Friday.

It also adjusted first-half 2011 reported sales downward from $1.52 billion to $688 million. Groupon said the previous documents filed with the Securities and Exchange Commission had "an error in presentation".

The move, which could delay its plans for an IPO, came on the same day that the company lost its number-two executive.

Margo Georgiadis, chief operating officer, has left after just five months at Groupon. Although she wrote in a departing note that she had "complete confidence in the team's ability to realize its mission", she left the Chicago-based company to return to Google (GOOG) as president of the Americas region.

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In its latest SEC filing, the company warned that investors should not rely on an optimistic and controversial memorandum to staff that appeared late last month on news Web sites. The memo had raised concerns that the company could fall foul of U.S. regulators' rules governing the "quiet period" before an IPO.

Ms. Georgiadis had struggled in dealings with Andrew Mason, Groupon's young chief executive, she told associates.

"She was brought in to implement strategy and operational discipline and she did it, but Andrew was fighting her every step of the way," one colleague told the Financial Times. This person described the former McKinsey consultant as effective but corporate in outlook, while Mr. Mason made decisions more instinctively.

Mr. Mason wrote on a company blog that he wished that all of his eight senior executives hired this year had worked out. "It would have been great if I could say that we batted 1,000 per cent, but that's rarely the case."

He said sales, marketing and other areas would now report directly to him.

People close to the company said that Mr. Mason was feeling intense pressure since his company filed a prospectus in June. At a mid-August board meeting, he faced particularly close questioning: The meeting was attended by John Doerr, an influential partner with Groupon venture backer Kleiner Perkins, even though Mr Doerr does not sit on the board.

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