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Groupon Shakes Up International Ranks

Friday, 13 Apr 2012 | 11:56 AM ET

Out with the old, in with the new.

Viet Dengler
Source: LinkedIn
Viet Dengler

Groupon announced in a statement Friday that Viet Dengler, a veteran of Dell , Procter & Gamble and McKinsey & Company, would join the daily deals site to spearhead its international operations, which have come under fierce scrutiny as the company has growing pains abroad.

Dengler replaces Marc Samwer, an entrepreneur that arrived at Groupon by way of its 2010 CityDeal acquisition. Samwer started CityDeal, Germany’s Groupon doppelganger, with his brother Oliver, and both stayed on board after the deal.

Groupon’s international segment is responsible for not only the lion’s share of its revenue, but also its growth. Groupon made $975.4 million abroad in 2011, a 767 percent jump from the previous year. In the statement, Groupon called Samwer’s leadership of the unit a “consulting” role.

A Groupon spokeswoman declined to comment.

The international unit has been unable to avoid wide criticism that has also hit its accounting tactics, vendor relationships and earnings calculation. In the company’s first quarter as a public company, Groupon recorded an average tax rate of 1,600 percent due to steep taxes in local markets incurred by rapid expansion.

Many observers would say putting experienced leadership at the helm of such a high-growth business is not only necessary but overdue. When Groupon was forced to restate its fourth-quarter and 2011 earnings, Grumpy Old Accountants wrote the following:

"When a company expands to 45 countries, grows merchants from 212 to 78,466, and expands its employee base from 37 to 9,625 in only two years, there is little doubt that internal controls are not working somewhere."

Groupon has said that establishing a permanent international headquarters would help at least temper the astronomical tax rate. By the end of the year, the company expects to funnel all international operations out of its new Schaffhausen, Switzerland, office, where Dengler will be based.

Samwer called Dengler an “excellent choice to lead the international business going forward."

Follow Kayla Tausche on Twitter: @kaylatausche

email: tech@cnbc.com

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