Now, I'd certainly never put any of my dollars anywhere near a groupon IPO, but the article seems a little harsh.
"Recognizing phantom revenue (dollars that are supposed to flow to their clients) and not actual revenue (their cut)"
This seems fairly standard to me. I mean, when I sell co-lo, rather more than half what my customers pay me goes directly to pay /my/ provider, and yet my revenue is all of what my customer pays me, even though no matter how efficient my operation becomes, more than half of the money only sits in my account momentarily. This is my understanding of the commonly accepted distinction between revenue and profit.
I mean, clearly, groupon is a very high-risk "swing for the fences" kind of startup, and ACSOI does seem to be sketchy to the point of being deceptive, but revenue is revenue, and profit is profit. There's nothing wrong with reporting your actual revenue numbers before taking out your expenses; that's what revenue /is/
If you're passing through revenue, though, it's often not counted, though it seems to vary by industry and exactly how it's passed through. For example, Paypal's revenue is only its fees on transactions, not the entire volume of transactions that flow through Paypal: its role is a facilitator, and its revenue is what it gets paid for facilitation. The same is true of marketplaces, typically; eBay's revenue is its fees, not the entire volume of purchases that happens on eBay. Groupon arguably has a similar structure, in that they're a marketplace facilitating sales, in which case only their fees should be revenue, not the total volume of goods whose sales they facilitated. But it's arguable.
"Recognizing phantom revenue (dollars that are supposed to flow to their clients) and not actual revenue (their cut)"
This seems fairly standard to me. I mean, when I sell co-lo, rather more than half what my customers pay me goes directly to pay /my/ provider, and yet my revenue is all of what my customer pays me, even though no matter how efficient my operation becomes, more than half of the money only sits in my account momentarily. This is my understanding of the commonly accepted distinction between revenue and profit.
I mean, clearly, groupon is a very high-risk "swing for the fences" kind of startup, and ACSOI does seem to be sketchy to the point of being deceptive, but revenue is revenue, and profit is profit. There's nothing wrong with reporting your actual revenue numbers before taking out your expenses; that's what revenue /is/