After more than six months of hunting for its next chief executive, District-based deals company LivingSocial named a new leader Tuesday: Gautam Thakar, the CEO of Shopping.com and general manager of eBay’s advertising business.
Thakar’s appointment brings an executive to the top of the company with a pedigree in e-commerce and digital advertising, search committee members said, an attractive combination as LivingSocial looks to return to rapid growth after months of decline.
“It’s pretty rare to find someone who has a pretty deep background in e-commerce and advertising, and, if you think about LivingSocial, to our consumers we’re an e-commerce company and to our merchants we’re an advertiser,” outgoing chief executive Tim O’Shaughnessy said in an interview.
Thakar currently runs Brisbane, Calif.-based Shopping.com, a Web site where consumers can compare the price of items, such as baby cribs, hand bags, cameras and couches, at multiple retailers. He also serves as the general manager of eBay’s advertising business.
Shopping.com was acquired by eBay in 2005, the same year Thakar joined eBay as a country manager in India. He held several roles at eBay, including senior director of international marketing, before shifting to leadership roles at Shopping.com in 2008.
“LivingSocial is well-positioned to play a growing role in demand generation for both local and national merchants,” Thakar said in a statement.“This is a huge opportunity that will be realized by delighting consumers with personalized services and experiences at great prices.”
Thakar, who was not made available for comment, will step into his new role next month. He plans to relocate to the Washington region with his wife and 3-year-old son, a LivingSocial spokeswoman said.
O’Shaughnessy, one of the company’s large shareholders, will serve in an advisory capacity for an interim period but vacate his seat on the board of directors when Thakar takes over, he said.
“One of the things people have started to hear me say is you can’t have two CEOs,” O’Shaughnessy said.
In January, O’Shaughnessy declared his intentions to step down as chief executive of the company he helped start seven years prior. His departure leaves just one of LivingSocial’s four original founders in place — Chief Information Officer Val Aleksenko.
The pair started the company, then called Hungry Machine, in 2007 with Eddie Frederick and Aaron Batalion as a development shop that built applications to connect big consumer brands with Facebook’s multiplying user base.
The team eventually rebranded as LivingSocial and ventured into the business of sending daily e-mails with discounts to local restaurants, boutiques and beauty parlors. Daily deals became a cultural phenomenon that propelled LivingSocial into a global brand with thousands of employees and business units scattered across the world.
But demand for daily deals began to stagnate and then retreat, forcing LivingSocial to hunt for other business models that could replicate its early success. As the company’s financial picture began to sag, it laid off swaths of its workforce, and shuttered or sold a number of overseas business units.
“The company did a lot of cleaning up the broken glass of all the growth over the last 12 to 18 months and this year started to lay some new foundational things,” O’Shaughnessy said.
That includes adding $260 million to LivingSocial’s coffers after its sale of South Korea-based Ticket Monster to Groupon closed in January, and another $18.5 million in April with the sale of deal sites in Southeast Asia.
LivingSocial also launched an online marketplace late last year where bargain hunters can scour thousands of coupons for national retailers and local merchants. Earlier this month, the company debuted The Daily Gem, a daily e-mail deal tailored to the recipient.
But LivingSocial finds itself at a precarious point. No longer a scrappy start-up but not yet an established company, Thakar will face the uphill challenge of putting LivingSocial back on a path to growth and, eventually, profitability.
“There is a necessary balance that any company has which is the balance between growth and operational excellence,” said Tige Savage, a LivingSocial investor and board member. “We have a guy with experience on both sides of the equation. How do we drive operational excellence at the same time we grow the business?”
“The company is nicely positioned to take this next step, but that will be the natural tension that he’s going to be focused on managing,” Savage added.
As for O’Shaughnessy, there are no immediate plans for a next venture or sense of foreboding emotion as he prepares to formally relinquish his title, he said. After all, the move has been months in the making.
“A lot of that occurred when I made the decision that I thought this was the right thing to go and do,” O’Shaughnessy said. “At this point, I made that decision and it’s been all about how we can set the company up for the best chance of success possible and a new leader for the best chance of success possible.”