New Groupon CEO: 'No fairy tale beginning'

Groupon CEO: Not a fairy tale start
Groupon: Completely different product than Amazon
Cramer's Mad Dash: Too early to buy Groupon

Groupon's new CEO Rich Williams told CNBC on Wednesday there would be "no fairy tale beginning" in his first day on the job, which came just hours after the company reported quarterly earnings that hit its stock price.

Shares of Groupon were tracking for their worst trading day ever Wednesday, down more than 27 percent to $2.92 by midday. The stock debuted on the Nasdaq four years ago at $20, about 85 percent above the current price.

On Tuesday, Groupon forecast 2016 revenue of $2.75 billion to $3.05 billion, below the average analyst estimate of $3.50 billion, according to Thomson Reuters I/B/E/S. The company also reported lower-than-expected revenue for the third quarter, hurt by lackluster sales in North America and a drop in revenue from other markets.

Read More Groupon shares slip 2% as Q1 outlook disappoints

Groupon announced the same day co-founder Eric Lefkofsky was stepping down as chief executive and returning to the role of chairman, effective immediately, and Williams, formerly chief operating officer, would take the helm.

Management also outlined a slew of measures to turn around its business, including spending $150 million to $200 million more on marketing annually and decreasing its focus on offering consumer electronics, which bring in higher revenue but yield lower margins.

The company will invest in better developing relationships with its 50 million customers worldwide and accelerate its transition from a daily deals website to a local marketplace, Williams told CNBC's "Squawk Alley" on Wednesday.

"The reality is we just haven't been investing enough in those relationships. We haven't been investing enough to bring more of those relationships to the platform," he said.

Read More Amazon's next chapter? Opening a physical bookstore

Though it started as a purveyor of discounts, Groupon has started selling products online. The company said the change in focus was expected to lower its current-quarter revenue by $50 million to $100 million.

While deals will remain a core part of Groupon's business, investors should expect to see more products and services not sold at deep discounts, Williams said.

"Supply and quantity and coverage and a density of merchants is critical to having a high-frequency, more sticky relationship, and one that's not as dependent on email as a channel to drive traffic, which for us is now the case," he said.

Source: Groupon

Email — previously central to Groupon's business — now accounts for less 30 percent of traffic to its site, as search and mobile drive more customers to the website, Williams said.

Read MoreWhen It Comes to Coupons, Shoppers Prefer Paper, Survey Shows

Still, growth in the company's active customer base slowed to 4 percent in the third quarter from 6 percent in the prior quarter.

Groupon's net loss attributable to the company widened to $27.6 million, or 4 cents per share, in the quarter ended Sept. 30, from $21.2 million, or 3 cents per share, a year earlier.

Revenue was flat at $713.6 million but missed analysts' estimate of $732.8 million.

But Wall Street analysts were not convinced. At least seven brokerages cut their price targets on the stock by as much as $5 to a low of $2.25. The median price target has nearly halved in the last three months to $4.

— CNBC's Karma Allen and Reuters contributed to this story.