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Andrew Mason Out at Groupon (Update 1)

NEW YORK ( TheStreet) -- Andrew Mason has been removed as Groupon's (GRPN - Get Report) CEO, effectively immediately, and is being replaced by Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis in the interim.

Lefokofsky and Leonsis will be part of the newly created Office of the Chief Executive. Groupon's board of directors will start searching for a new CEO in the meantime.

"On behalf of the entire Groupon Board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history," said Lefkofsky.

"Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future," said Leonsis, in a press release sent out after market close.

Groupon reported fourth-quarter results on Wednesday that caused some to question whether Mason would continue much longer in the role.

In the release announcing Mason's departure, Groupon noted that its first-quarter outlook remains unchanged. On Wednesday, Groupon provided first-quarter guidance that was sharply below Wall Street expectations. It expects sales to be between $560 million and $610 million, a year-over-year increase of between 0% and 9%. Wall Street analysts are expecting $647.7 million. Operating (loss) income for the first quarter 2013 is expected to be between $(10) million and $10 million, compared with $39.6 million in the first quarter 2012.

Shares of Groupon closed the regular session off 24.28% to $4.53. The stock is moving higher in extended-hours trading, up 5.74% to $4.79 according to

AllThingsD has obtained a copy of Mason's departure letter, which shows his quirky and humorous side.

Here is the letter in its entirety:

People of Groupon,

After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding - I was fired today. If you're wondering why... you haven't been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I'm getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we've shared over the last few months, and I've never seen you working together more effectively as a global company - it's time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don't be - I love Groupon, and I'm terribly proud of what we've created. I'm OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I'll now take some time to decompress (FYI I'm looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I'll figure out how to channel this experience into something productive.

If there's one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what's best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness - don't waste the opportunity!

I will miss you terribly.



-- Written by Chris Ciaccia in New York

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