The Media Oxpecker: The Tragic, Untimely Death of Groupon's Adjusted CSOI

august 12, 2011  03:30 pm
The Media Oxpecker: The Tragic, Untimely Death of Groupon's Adjusted CSOI
Adjusted CSOI, we hardly knew ye. (Image via Boulder Weekly)
Every Friday we round up media & tech industry news you may have missed while you were busy being censored.
  • Two weeks ago we introduced you to this season's hottest accounting fad — adjusted CSOI — which hides unseemly blemishes such as marketing expenses while accentuating your company's figure-flattering profit lines. Using adjusted CSOI, Groupon transformed its hideous $98 million quarterly loss into a fabulous $81 million gain.

    Sadly, an inquiry by the Securities and Exchange Commission is prompting Groupon to put the kibosh on its adjusted CSOI party. This week in a 'tell-all' filing the company revealed that it lost $181 million last year, compared with the $60 million adjusted CSOI it had initially reported. In the 2nd quarter of 2011 Groupon reported a loss of $102 million.

    These revelations, combined with figures showing that only 20% of Groupon's registered users have actually purchased a deal, have some observers gossiping that the company isn't exactly runway material.

  • With adjusted CSOI now officially 'out,' trendspotters are eyeing AOL's depressed share price and speculating that the company could be 'in' as a prime target for an acquisition:
    . . . some in the industry — at private equity firms and bigger companies — have noted to me that the price of AOL might have gotten low enough for a very cheap takeover.

    “You have to look, even with all the problems they have been struggling to fix,” said one person, who also underscored the advertising and other challenges that AOL faces. “But it is so inexpensive, it’s also an interesting idea.”

    Said another large investor: “It’s almost free, given its cash on hand.”

    Investors dumped shares of AOL earlier this week after the company reported a loss of $11 million and an 8 percent revenue reduction. The company's acquisition of Huffington Post has helped boost ad revenue, but revenue from dial-up subscribers continues to plummet.

    Analysts have previously estimated that ad revenue would have to grow by 20 percent annually to keep pace with the exodus of dial-up customers, a far cry from the current 5 percent level of growth.

  • In contrast with AOL's anemic growth, Mother Jones says its digital ad revenue has grown by 97 percent over the same period last year:
    Steve Katz, Mother Jones’ publisher, attributes that in large part to plain-old, straight-up good content: content that got traction, content that got attention. During the time of the traffic rise, MoJo sent reporters to the oil-spill destruction in the Gulf; to the protests in Wisconsin; to Haiti. It produced a series of popular explainers. Infographics from Kevin Drum’s big story on inequality in America got picked up by huge outlets like Yahoo News and — the holy grail — The Colbert Report. “So there was a whole series of reporting efforts that were going on that were generating more traffic for us,” Katz says. And what resulted was “a wonderful virtuous circle.”

    Also seeing strong growth is Demand Media, which reported a 39 percent increase in revenue during the first half of 2011.

  • An analyst from Deutsche Bank says that 2012 advertising budgets could be a victim of the current economic turmoil, with one qualification:
    "Ad spending has not fully recovered from 2008-09 lows so our assumption is that if there is a downturn, it will not be as severe as 2009," the analysts' report notes. "Agencies have stronger balance sheets now (as do the major brand owners who pay them), and industry headcount has not been rebuilt to previous peak levels."

    Meanwhile, it was reported that U.S. magazine circulation declined by 45 percent during the first half of 2011.

  • Corporate buyers and consumers of paper are propelling changes in the pulp and paper industry that are having a positive impact on energy consumption and reducing the industry's environmental footprint, says a recent report by the Environmental Paper Network. (h/t Deborah Redmond, News & Review)

  • Though Gannett laid off 700 newspaper employees in June, the company has found plenty of cash to build a corporate marketing department in New York and hire its first Chief Marketing Officer for an all-important branding awareness campaign.

  • Yahoo announced a deal with Belo, which will deliver local ads across Yahoo sites.

  • A study of web traffic found that links from other news sites are more important than referrals from social media.

  • The New Yorker has launched a new entertainment listings app. While the official New Yorker app costs $60 per year, the new app is free of charge.

  • Digg has added some new features, including a "newswire" function that allows for customizable sorting.

  • And last but not least, say hello to Sartalics: "the font designed for sarcasm."