"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."
Those words kicked off Andrew Mason's letter on Feb. 28, 2013, notifying Groupon employees and the general public that he had been pushed out of the daily deals company he'd helped create. "If you’re wondering why," Mason wrote, "you haven’t been paying attention."
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Mason went on to list a few of the company's biggest letdowns to that point: a turbulent IPO process, back-to-back quarters of missing its earnings estimates and a stock that had cratered to a quarter of its IPO price. Mason didn't even get into the company's international struggles, the larger problems in the daily deals space or the fact that one day earlier, Groupon's stock had fallen by more than 25% after hours following an earnings miss.
As one source close to the company puts it now, the company — and particularly its international operations — were in a "free fall."
One year after Mason's departure, Groupon's business has shown signs of improvement. Under the leadership of Eric Lefkofsky, who took over as CEO after Mason, Groupon has built up its Groupon Goods ecommerce service, expanded its travel and fashion offerings through acquisitions and worked to stabilize its international business. The company also overhauled its apps and website to encourage customers to search for deals rather than wait to receive notifications by e-mail, though that redesign began while Mason was still in charge.
The fruits of these efforts could be seen in Groupon's fourth-quarter earnings, which the company reported on Feb. 20. Groupon's sales grew 20% year-over-year to $768 million, coming in well ahead of Wall Street estimates, while operating expenses declined slightly. At the same time, Groupon's mobile business continued to trend up and now accounts for "nearly 50%" of transactions.
"I think we'll look at [2013] as the year of stability when we got focused on the things that we had to do right to really get to the next level," Lefkofsky told Mashable in an interview on Thursday. "We got focused on stabilizing our operations so that we could have a solid foundation and we could grow."
Does that mean Groupon's worst days are behind it? Lefkofsky says yes, but he's quick to add that he "would have said that a long time ago." Indeed, he bristles at the idea of a Groupon turnaround, arguing instead that its business is strong.
"The very notion that it's a turnaround, I think, is just almost unimaginable to me."

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Lefkofsky may refrain from framing the last year as a turnaround effort, but others aren't shy about it. Multiple analysts we spoke with argued that Groupon has made strides towards improving its business, but still has work to do.
"I don't think they are out of the woods, but the numbers now are at least more plausible than they were a few years ago," says Sucharita Mulpuru, a retail analyst with Forrester Research. "Now what they have is closer to a sustainable business model."
The core of that sustainable business is Groupon Goods, which has become the company's fastest-growing segment. "Groupon Goods is healing this business," Mulpuru says. But that poses a different set of challenges for a company that got its start offering vouchers.
"Once you are in the physical goods business and that's fueling your growth, you have to be very careful about how you are growing the business," Mulpuru says, highlighting the need to invest in logistics and fulfillment. "That was one of the things that was so attractive about the voucher business: there was no inventory. It was like a digital goods business."
Those challenges are all the more pressing for Groupon as investors remain laser-focused on the company's profit margins.
Even after reporting strong earnings in the fourth quarter, Groupon's stock plummeted by more than 20% as investors homed in on the company's lower-than-expected guidance for profits in the upcoming quarter. As it so happens, that marked the stock's largest single-day decline since the day Mason was fired.
"Investors expected perhaps too much too quickly," says Arvind Bhatia, an analyst with Sterne Agee. "They are making good progress, not great progress, but good progress. It's still a prove-me story."

This time last year, there weren't just doubts about Groupon; there were doubts about the entire daily deal industry.
"The industry was having growing pains," Tom Forte, an analyst with Telsey Advisory Group, says, putting it mildly. "LivingSocial has definitely fallen upon hard times. I think there are several, perhaps more than 100, venture-backed daily deal sites that have closed their doors."
Lefkofsky readily acknowledges that Groupon has outlasted many of its competitors. "There was this fear, I think, three years ago before we went public that anyone could do this and it was easy to clone and there was no barrier to entry," he says. "Now here we are three years later and we've proven that there are significant barriers to entry in the space."
Groupon has no plans to ditch daily deals, but if the company does end up going down as the last man standing in the space, it will be largely because of the company's work to move beyond just offering daily deals.
Groupon is transitioning from being solely focused on alerting customers to daily deals via email, or "push" marketing, to letting users search its newly redesigned website for an inventory of deals and discounted items, also known as "pull" marketing. It's a natural shift from a business perspective, but it's one that requires a change in consumer behavior.
Part of the reason Groupon projects lower-than-expected profits for the first quarter is because it plans to spend $25 million on marketing and other initiatives to drive more users to its site.
"This evolution will take some time," Forte says. "There are still some that aren't familiar with the current state of Groupon and view it as the company that sends me an email every day." But Forte is bullish that Groupon will be able to make the shift and will go down as one of the "most significant" e-commerce platforms.
Lefkofsky, for his part, is optimistic about Groupon's future. "If 2013 was a year of stability," he says, "then 2014 is a year of reinvigorating growth."
He adds: "I think our best days are by far ahead of us.