Jan. 10 (Bloomberg) -- LivingSocial Inc., a daily deal coupon site that’s partially owned by Amazon.com Inc., said co-founder and Chief Executive Officer Tim O’Shaughnessy is stepping down amid stagnant sales.
LivingSocial is starting the search for a replacement today and aims to name a new CEO in the first half of 2014, O’Shaughnessy said in a blog post on the Washington-based company’s website.
Deal sites LivingSocial and larger rival Groupon Inc., which surged in popularity in 2010 and 2011, have struggled since as nail salons, gyms and restaurants turned away from offering such steep discounts. After lining up $400 million in funding at a valuation of $6 billion in 2011, LivingSocial’s business stalled and Amazon steadily wrote down the value of its ownership.
“The road we’ve traveled has not been straight and it has not been without bumps, but it has been, undoubtedly, extraordinary,” O’Shaughnessy said in the blog post. He said in an interview that it was time to hand over leadership to someone else and didn’t say what he plans to do next.
Amazon, which owns a 31 percent stake in LivingSocial, said in October that the startup’s revenue in the first nine months of the year slipped to $384 million from $387 million in the same period a year earlier. Amazon, based in Seattle, reduced the value of its investment to $15 million from $25 million at the end of June and $192 million in mid-2011.
The revenue dip was the result of the company getting rid of some products that don’t generate profit, O’Shaughnessy said. Revenue for the full year was close to $400 million, thanks to a big holiday season, and the company has hundreds of millions of dollars in the bank, he said.
“The week of black Friday and Cyber Monday was the biggest revenue week we’ve ever had in company history,” O’Shaughnessy said.
LivingSocial’s other investors include Revolution Partners LLC, which is run by former AOL head Steve Case, Lightspeed Venture Partners and T. Rowe Price Group Inc.
The company was in talks with banks in 2011 about an initial public offering until Groupon went public in November of that year and lost more than four-fifths of its value over the next 12 months. Even after doubling in the past year, Groupon is still 42 percent below its IPO price.
O’Shaughnessy’s departure comes 10 months after Groupon CEO Andrew Mason was ousted from the Chicago-based company that he co-founded.
“We need to get more honed in on serving the marketing needs of businesses,” O’Shaughnessy said. “We are a marketing platform that connects consumers and businesses.”
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