Good day, everyone and welcome to the Groupon's second quarter 2013 financial results conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the company's formal remarks. (Operator Instructions). Today's conference call is being recorded. For opening remarks, I would now like to turn the call over to the Senior Director of Investor Relations, Genny Konz. Please go ahead.

Hello and welcome to our second quarter 2013 financial results conference call. On the call today are Eric Lefkofsky, CEO, Kal Raman, COO and Jason Child, CFO. Additionally our new Chairman, Ted Leonsis is on the call for any questions you might have on the CEO announcement. The following discussion and responses to your questions reflects management's views as of today August 7, 2013 only and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and in our filings with the SEC including in our Form 10-Q. During this call, we will discuss certain non-GAAP financial measures. In our press release and our filings with the SEC each of which is posted on our Investor Relations website, you will find additional disclosures regarding non-GAAP measures including reconciliations of these measures with U.S. GAAP. Finally, unless otherwise stated all comparisons in this call will be against our results for the comparable period of 2012. Now, I’ll turn the call over to Eric.

Thanks, Genny. We are pleased with our performance in the second quarter of 2013, exceeding the top end of our operating profit range by $19 million, gross billings growth of 10% year-over-year was driven by 30% growth in North America. Revenue growth of 7% was driven by 45% growth in North America. And sequentially, operating income excluding stock-based compensation and acquisition-related costs known as CSOI improved by about $8 million reaching $59 million, and adjusted EBITDA increased to $81 million in the quarter. I want to start by reviewing the highlights. First, our North American business led the way with its best quarter ever, posting revenues of $377 million and segment operating income of $49. What’s most impressive about our North American business, which now represents over 50% of our billings is that our year-over-year billings growth accelerated from 23% in Q1 to 30% in Q2, despite marketing expense actually been down from Q2 of last year. To generate organic billings growth of 30% and still reduce marketing expense is a sign of how true we committed our customers at Groupon. Second, we changed our segment reporting this quarter, breaking out EMEA from rest of the world, which provides a better sense to the financial profile of our regions. EMEA billings returned to year-over-year growth this quarter, improving from an 8% decline in Q1 to 4% growth in Q2 as we began to emerge from a difficult period of stagnation. Despite take rate investments, which impacted our revenues, we still generated a 15.4% segment operating margin in the quarter, which compares favorably to 12.9% in North America. So as you can now see, not only do we make money in North America, but we also generate operating income in EMEA and have consistently done so since the middle of 2011.…

Thanks Eric. We recognized that building a great company for the long run will be enabled in part by a culture that rapidly syndicates and embraces the best practices to enhance merchant and customer experience across functional and geographic borders. Everyday thousand of frontline Groupon employees are interacting with our customers and merchants, learning from them and innovating to deliver more value. Rather than continually reinventing the wheel, we must rapidly leverage our scale and drive innovation globally on a common technology and business platform. Let me provide a read on our progress, first spot deals of personally efficient algorithm is up and running in seven of our 10 largest markets. We expect to see lift in our business as we build our deal bank inventory to enable greater relevancy and optimize algorithms for each market. But it will take some time to get the levels of lift we have seen in North America. We’ll then turn our product and engineering resources to our front-end customer experience. Second, the deployment of our back office sales and customer service tools continues. We have migrated to a unified sales force platform in 14 countries, which provides a foundation for all of our sales activities. Deployment of Deal Wizard, our capacity management system is also complete in these countries. Coffee, our return on investment calculator for our merchants is in all 48 countries and has seen higher adoption internationally than in the United States. Our lead management system is now live in 37 countries. And Quantum Lead, our next generation lead management tool is all set to pilot in the United Kingdom in Q3. And we are targeting deployment in our top five countries by the end of this year. Coffee-to-Go, a mobile app that incorporates many of our key sales tools for our outside reps is currently being rolled out simultaneously in the United States and the United Kingdom. At first, well, we are launching a new tool across different countries simultaneously. Third and finally, our work to integrate our many technology platforms continues. Our North American and European platform which serve the large majority of our business globally are on track to be largely integrated over the next several quarters. With this, we’ve already seen a productivity within our European and Middle East and African segment improved dramatically year over year. I look forward to reporting our continued progress in EMEA and as we turn our focus to the rest of the world. To be successful, every employee, merchant and customer should have the personal experience, every time they interact with Groupon, whether they are working in Seattle or Singapore, whether they are buying a deal in Boston or Berlin, and whether they are selling their products in Brazil or Bangalore, India. Now to discuss the results, I’ll turn the call over to Jason Child.

Thanks Kal. With the details available in this afternoon’s press release, I am going to run through the highlights of the quarter and then provide our outlook. Note that all comparisons unless otherwise stated refer to year over year growth. As Eric mentioned we’ve changed our segment reporting which now provides additional visibility into performance across our international footprint. Going forward we will report three segments, North America, EMEA, and rest of the world comprising Asia-Pacific and Latin America. In summary, gross billings increased 10% to 1.14 billion led by growth of the goods category. North America growth of 30% and EMEA growth of 4% was offset in part by 21% decline in rest of world. Sequentially gross billings increased by 6 million. Revenue increased 7% to 609 million. North America growth of 45% was offset by a 24% decline in EMEA and a 26% decline in rest of world. EMEA revenues were impacted by a deliberate reduction in take rates as well as other consumer incentives as we invested in the growth of the business. Sequentially revenue increased by 7 million. Gross profit decreased by 11% to 385 million, again largely as a result of deliberate take-rate reductions in our international segments and was about flat sequentially. Overall category mix was roughly consistent with the first quarter. Within North America, gross profit increased 12%, low relative to 45% revenue growth due to a greater mix of direct. Operating income, excluding stock based compensation and acquisition-related costs, was 59 million, declining 13 million compared to last year’s second-quarter when our international business was larger but improving 8 million quarter over quarter. Rest of world generated a $14 million loss in the quarter but contributed to the sequential improvement. Adjusted EBITDA defined as operating income less depreciation and amortization and further…

Thanks Jason. The opportunity before us is substantial. Merchants need customers and customers crave simple tools to discover and buy locally. I believe that Groupon is in a position to redefine local commerce. If we’re successful in shifting consumer behavior and increasing our customers’ reliance on Groupon as their primary mobile commerce provider. Armed with our current market advantages which include over 200 million subscribers, nearly 43 million customers consume nearly 50 million Groupons every quarter, over 500,000 merchant partners, over 50 million app downloads, nearly 11,000 employees operating in 48 countries and over 54,000 deals on average in North America alone, we believe we are better positioned than any other company to redefine the local and mobile commerce landscape. I want to emphasize that while we are pleased with our performance in Q2, we are still building the very foundation of the business as we migrate from a daily deal model to a full e-commerce marketplace. The process of building is a marathon rather than a sprint and will require a lot of continued hard work and solid execution. When Ken and I took this job nearly 6 months ago we expected to begin a CEO search. However as Groupon has both grown and evolved, the board felt strongly the continuity was important to capitalize on the opportunity in front of us. We simply have too much to do in building out our business model, we take on a transition at this point. As a result, the board has asked me to stay on a CEO which I have agreed to do for the next few critical years. Ted will assume the role of chairman and will continue to provide experience and leadership to the management team and the board in much the same way he has over the past six months. I want to personally thank Ted for his service. He has been and continues to be a true partner of mine in this effort. I look forward to serving with him and serving the stakeholders of Groupon for years to come. With that, let’s take some questions.

(Operator Instructions) Our first question comes from Ralph Schackart of William Blair.

Looking at the Q2 unit growth acceleration in the quarter 45% North America this quarter, up from 37 last quarter. Can you sort of give us a little bit more color what's driving about that? I know you talked about poll that was also accelerating on a international basis as well. And then turning to the average spend customer metrics, nice acceleration North America, you're starting to see flattening out in the rest of the world and EMEA regions. As you roll out One Playbook, should we assume that these trends are sort of flattening out and should grow again on an average customer basis going forward?

So I'll start with what's driving the North America unit growth. So, it's predominantly driven by an acceleration of local in the quarter from 17% Q1 to 22% in Q2. That made up the biggest lift. And it's also -- I think the good news for us is that our unit growth has been outpacing even our billings growth, which has been a sign of strong consumer demand. And it's -- even in North America which accelerated from 23% growth in terms of billings in Q1 to 30% in Q2. So the fact that our units are growing even stronger is a great sign. And in terms of the spend, TTM basis per customer again, I think the North American story is quite strong with acceleration in Q2. And we would expect as we roll out One Playbook, as we roll out Poll, as we roll out all those initiatives and as mobile takes on a greater foothold internationally that we would see similar signs.

Let me add to it, this is Kal. In North America, the customer demand we've just mentioned and are represented by units is accelerating which is very encouraging, so is the merchant satisfaction. As we mentioned in the script, more than half of our merchants come back to us. As a matter of fact, in June 75% of our merchants put their inventory perpetually available in Groupon. So, we're getting the growth because we're taking care of our merchants and customers. And with respect to your second question on the average spend metrics flattening out internationally, I’ll rather repeat the same thing, it all stops at the merchant and customer satisfaction. As we told you in the script as well as in the press release, our [inside and C set] growth internationally have grown more than 10% year-over-year. And that is a result of all the hard work we are putting in and controlling the controllable which is through One Playbook. As we could see, the business has accelerated in Europe from a negative 8% year-over-year last quarter to positive 4%. We see progress but as we continue to focus on merchant experience and customer experience to One Playbook, we believe that since it would be positive for the company.

Great. Thank you.

Thank you. Our next question comes from Ross Sandler of Deutsche Bank. Your question please.

Great. Thanks guys. I just had one question on the marketplace and then two questions on the international. So I think you said the marketplace business in North America is up to 54,000 merchants in perpetual deals. What is the velocity of transactions for that side of the business i.e. the Pull side of the business look like? Are you seeing greater spend for customer or greater conversion rates when those deals are up in the marketplace model? And then on international, Jason, your comments on ROW, so how long is that likely to take to kind of rationalize? Is that you’re going to involve divesting some countries or is it just rollout the EMEA playbook on a lag basis for those countries? And then the last question for, Kal, it seems like EMEA is at least halfway if not three-quarters of the way to being up and running with North America best practices. So when are we likely to see billings growth look more like North America and EMEA? Is that end of this year? Is that a 2014 event? Thanks.

I’ll start with the marketplace question. So we’ve made great strides. If you think about our migration from predominantly email business to be much more of a marketplace, it’s only being going on for a few quarters and we’ve made fantastic strides, especially in supply, where even last quarter we had 40,000 deals in North America, we’re now up to 54,000. We’ve also made great strides in reducing our reliance on email. There was only a few short years ago email was virtually all the business and today it’s less than 40% of the business. So we’ve made great strides. We also see, the good news for us is we see most active cohort of customers engaging with the marketplace most often, they’re browsing, they are searching, they’re going to the all deals page and typing in keywords and been pulling down and buying deals. So it’s very encouraging. In terms of how much of our business is Pull versus the other segment? You can look at it -- when you look at the email part of our business, you can get the clear sense as to how much it’s driven by us sending out a feature deal and again that’s under 40%.

So as -- so Ross, your question on rest of world, I think, first, the rest of world is primarily Asia-Pacific and Latin America or what was -- or countries within those regions. And if you think about the age of those businesses, the youngest one is about a year and a half, and even the oldest is just hit three years I think last month, and so they are very, very young operations. There is a variety of performance within rest of world. There are many countries that are actually growing very solid and some that are actually growing negative. So, at this point, I think it’s a little early to focus too much on what the current results are. I think the long-term approach is as we rollout, as you referenced, as we rollout the One Playbook that we’re in the midst of doing in EMEA now and take that to these rest of world countries. We expect to see similar results that you’re now starting to see in EMEA and then longer term will look more like North America.

Yeah. Let me add a point to the rest of world before I answer your question on EMEA. Rest of world also, the operating loss, like we have reduced it by $10 million Q-over-Q and that is by focusing on the first steps of One Playbook of shutting down unprofitable cities and stopping us from doing business in unsustainable categories and stuff like that. So we already have started the rationalizing of One Playbook like we have done in EMEA two quarters back. Like Jason said, as we rollout One Playbook, we believe we can turn them around the way. We are turning them around the EMEA markets. But we will be physically very prudent and responsible to ask this tough question on, should we be in a country or not on a regular basis, which we do on a monthly quarterly basis within the company. With respect to EMEA, I always believe in order to build a sustainable business we need to create a ecosystem of happy merchants and happy customers. As we could see the merchant satisfaction and customer satisfaction [United States] the highest we have in the company and the growth is the direct reflection of the satisfaction of the merchants and customers, with all the One Playbook and all the efforts we have put in place in EMEA in the last 6 to 9 months, our merchant satisfaction, customer satisfaction has gone up 10% year-over-year but it's still lagging behind NHC. So as we continually focus on the merchant and customer experience by implementing these strategies and being relentless about the day-in and day-out the growth will follow. And the beauty of our EMEA markets, our operating leverage in EMEA as we could see in the press release is already at 15.4% compared to the 12.6%. So, it is a very healthy business. Now we need to continue our merchant and customer satisfaction and the growth will follow and look like the United States.

Our next question comes from Heath Terry of Goldman Sachs.

If there are specific technologies or strategies that are driving growth in the U.S. business that has yet to be employed internationally that you can kind of point us to. And then also to the extent that you’ve had a few weeks of it, that you have got any sense of what kind of impact you're seeing on either open rates or conversions post the changes that Google has made to Gmail as it relates to what they are calling promotionally now ?

So I'll take the first one, I'll let Eric answer the second one. Technology has always the means to the end. So there is no one silver bullet of technology but all our technologies are built in such a way if it’s delayed our merchant or customers. So, the deal bank which is our proprietary on inventory system which we have rolled out in EMEA right now. As we continue to increase the number of deals like we have done in the United States, that technology will have humongous benefits to our customers, our merchants and to our business. And similarly it is very true with all the back end tools we have rolled out, everything across the – to deal with it and all the sales ventures, they will not only improve the productivity which we could see in our SG&A reduction, they will also improve the quality of the merchants we bring to the EMEA platform. And we're early stage, like I told in the last two calls, this turnaround is not a one or two quarter turnaround, it's a marathon and I am glad we're making progress because we've got a 8% year-over-year growth in billings, operating leverage is 15.4%, insight is up 10% year-over-year. These are all great indications that we're in the right direction but no sense of imagination the job has done but we're very pleased with the progress we've made.

And I think just to reiterate then I will talk about Gmail. At the core -- if you think about the core technologies that are leading to the North American business performing so well, again rising from 23% year-over-year growth to 30 this quarter it is predominantly the fact that we're so highly penetrated in mobile and we have this vibrant poll marketplace. And there is a lot of technology that supports that, certainly as Kal mentioned a second ago deal bank being a key component, we've made great strides with the technology we call smart deals by which we're taking these deals out of deal bank and using technology to figure out how to expose them. But this is all being migrated through One Playbook along with all the back office tools we have to various parts of the world. And the good news to answer your second question is, because we've done so much work in North America, we've reduced our reliance on e-mail dramatically, again it's less than 40% of our business. And so, we just have become less dependent on that channel and so at present moment we're not seeing any material effects. As the Gmail rollout -- but again I think it's they are still rolling it out and we'll see as time goes on.

Our next question comes from Eric Sheridan of UBS.

I have two quick questions. One, (inaudible) at the mobile transaction model in North America, want to understand the different issues you need to participate in the business a lot of your purchases or a balance of your purchases on a mobile basis versus non-mobile basis in North America? And then second, on the buyback want to understand sort of how the companies think about the buyback going forward and then since the Ted is on the call maybe how Ted, Eric and the board are thinking about the additional 900 million in cash on the balance sheet as the long-term asset of the company? Thanks.

So let me -- let’s talk about mobile business first then Jason can jump in. When you look at our mobile business, as we discussed historically, we’re fortunate that our mobile users tend to be the most engaged. So -- and the mobile app right now is the universal app which means that both an iPhone and Android, it’s very similar through the entire world, unlike our North American Technology stack which is we have multiple different and again Kal covered it historically, we’ve multiple different technology that we’ve kind of unified under one playbook. But mobile is already unified and our mobile users tend to be most engaged. They are searching and browsing the most often and they’re buying those often. And when you’ve seen just in this last -- just in last quarter that our North American purchasers happen to be the most penetrated in mobile of buying more often. Our TTM has gone up from, I think, 151 to 156 and our average purchases per year have risen as well. So, people are buying more and a big part of that is being driven by mobile. The good news again for us on the international front is that even though we’re not as penetrated internationally in mobile, it’s accelerating at a faster pace. And so eventually we expect to be authority down the road. So let me give it to Jason to talk a little bit about then buyback and then either Ted or I talk about the rest of the cash.

So first on the buyback, I would say, at this point, we’ve just announced an authorization that will be executed some time over the next 24 months. I’d say recall that we do have about $1.2 billion in total cash on the balance sheet and than depending on which, liability you want to net against it, you can net that down. So I think you said $900 million, there is a variety of ways to look at it but it’s a strong cash position nonetheless. We have generated $75 million of free cash flow, they are trailing 12 months as well. So in term of the timing and amount of any repurchases, this is to be determined based on the market condition, share price, another factors over the 24-month period. And lastly, I would just say that the board has actually been looking at this for some time but felt like the company now is on solid foundations, so now was kind of the right time.

And just kind a give maybe a minute of color on the rest of the cash that we have on our balance sheet. And again as Jason mentioned, it’s not as if the buyback will occur over time. So, we have a $1.2 billion of cash and we generate cash. But the -- I think the way we view it is probably not similar from other large internet companies which is when technologies are changing as fast as they are in today’s environment. And we’re moving through this amazing migration and moment in time when smartphone adoption is becoming so pervasive and more and more business is moving from PC to mobile. And it’s just, I think, critical for companies like ours to have the resources on hand to be able to innovate and move quickly and take advantage of this location in the market. And so you tend to see technology companies that have a lot of cash and we’re fortunate that we have a great balance sheet as well.

Great. Thank you guys.

Thank you. Our next question comes from Gene Munster of Piper Jaffray. Your question please.

Greetings. Congratulation, on the question just on take rate and some other ranges, that kind of think about how that could isolate going forward and maybe in particular, it sounds like we’ve seen some stability in the U.S. as you bring the playbook outside of the U.S. Could you start to use take rate as a more of our lever to entice merchants unlike you did a couple quarters ago? Thank you.

Yeah. We believe our take rate in the long term would be in the guidance we have given. So we expect the businesses to operate in same agility between 30% to 40% like you have given you in the past quarters. We are very confident that we can maintain it. In the meantime, the take rate that just once you have seen in EMEA and rest of the world is all towards -- we want to attract high quality merchants, who will give great customer experience and delight to our customers and we want to get as many of them on our platform. And through one play book, we could standardize the process like we’ve done it in the U.S. and we’ll also get the efficiencies out of it in the long run.

The other thing I would add is that in terms of making investment in take rates, that’s certainly is part of kind of what we call marketing incentives. So we think about extending discounts to try to get customers to activate or to offer lower a take rate to try to get new merchants on the platforms. As we are now into Q3 and looking at Q4 which are is our seasonally strongest quarter of the year, you should expect us to make some take rate investments which is certainly part of the consideration for the guidance range we gave on our operating income .

And just to get back to that 30% to 40% we've seen a lot of stability in the take rate in the last two quarters, is there based on what you did mentioned and just to think about that 30% to 40% range, when you say that I really think it's 33 to 38. Is it really 30 to 40 and can we see some – should we just be prepared or there could be some strategic swings that could be a little bit more measurable. Or do you feel like there is some more stability in how that plays out.

Look I’d say there is clearly more stability in the business right. As you've seen over the last couple of quarters. So we're not here to tell you that there is kind of massive instability on the horizon, but we are I think trying to be more conscious of saying is that this business is not even five years old and we're investing for the long-term. And as Kal has mentioned numerous times we're investing to build a healthy ecosystem we can in terms of customers and merchants and you really want to get to attract the highest quality merchants and customers on the platform. At times you may have to invest in take rates and we have done that and we'll continue to do it.

Our next question comes from Jordan Rohan of Stifel, Nicolaus.

I'm curious about the category and market closures for the RW. Can you give us an idea of how expensive those have been? How much of that 10 million in lower loss -- reduced loss that accounts for RW and specifically why we're at the markets that appear not to be working. What was lacking from those, was it density of population or any other characteristics you can share?

Yes I think we have to be very cognizant of very important fact here. Groupon is not even five year's old and our international business is 3 or less years old and some of the countries are as old as year and a half. So, we're about creating a category, not running a business in the category which already exists and as we continue to do, we've been doing it in disparate ways worldwide and this is the first time since last year we've focused on One Playbook. So, as we continue to roll out the One Playbook you will see lots of similarities in the KPIs with which we run the business and the output result we would get. So it is too early to say that we have some countries -- not the right market for Groupon or not, but having said that the board and the management team seriously go through the exercise on a monthly and quarterly basis to make sure that we're on the right categories which are sustainable where we can give great customer experience and merchant experience and we also make sure that we're in the right cities which are sustainable based on the demographic of the customers, we want internet penetration, public penetration so on and so forth. And we're focused on it in the U.S. we've done a good. We've been focusing on EMEA which is our largest international segment for our last nine months. Now as I told in my script, we're turning our focus into rest of the world and you'll continue to see progress and you can be rest assured that we will be physically extremely responsible in possible in what decision we will make.

Kal, how many markets are you still in and how many did you exit this quarter?

We are in more than 1000 cities and we haven't disclosed exactly how many cities we have open and how many cities we have closed. But we could say that we are in more than 1000 cities and we are in 48 countries. And we are diligently looking through this -- believe it or not on a monthly quarterly basis. And it's actually lots of fun for me because some of the countries and cities I have never seen myself in the world map and we are very proud that we got a Groupon brand which is appreciated and needed by people all over the world. Because – whether people live in China or India or United States, people want curated deals at unbeatable value. And that value proposition is very common across the world and we are trying to serve that.

Our next question comes from Arvind Bhatia of Sterne, Agee.

A couple of questions. One is related to your TAM opportunity, I noticed that in your slide presentation, you've taken up the addressable number of merchants from -- I think it used to be 18 million to 30 million, just curious kind of what went into that thinking there? And then second question is, you’ve talked about this in different ways, but productivity of sales force internationally how, that’s about half of the U.S.? As you go towards the sale service platform, just wondering how that’s going to impact your headcount and productivity and stuff like that? Thank you.

Yeah. So, starting with the total addressable market, I mean, people define our addressable market in different ways, right. I mean, but it certainly measured in the trillions. Local commerce is more small segment of the worldwide -- worldwide GDP and way to I think, think about Groupon and the opportunity in front of us is. You only can go buy a TV or something similar, maybe once a year, twice a year, whatever it is. But people are eating out just alone in North America I think five times a week and doesn’t include all the other local services that you buy, from health and beauty to activities to fitness and on and on. So we sit in this massive market opportunity that we are in the midst of trying to revolutionize. And on top of that as we’ve extended into the travel business GrouponGetaways and the product business Groupon Goods, and the live event being GrouponLive, we just keep adding to our addressable markets. So and I would add that as mobile permeates more and more of commerce, and we are literally ground zero of the intersection between mobile and local, the opportunity gets even bigger. So, at Groupon the good news is that there is so much headroom in front of us that we tend to be more focused the next executional step in front of us to how big the market is, because we are just lucky that we live in this large market.

And the question on productivity between EMEA and the U.S., like the good thing is that the tools we have put in place, not only we have increased the product, improve the productivity in EMEA in the last quarter. We are also continued to see increasing the productivity within U.S. through sales service and other areas. So it would be marathon, we would never be satisfied with. We want to continuously increase productivity and the quality of the merchants we bring into the ecosystem. The beauty is, in the last quarter, year-over-year we have reduced 100s of sales support jobs, while we have added 100s of frontline sales jobs and we have increased the topline and the productivity, and as we could see now, SG&A which has come down is directly because of that change.

Great. Thanks guys.

Thank you. Our next question comes from Scott Devitt of Morgan Stanley. Your question please.

I was wondering how you think the LivingSocial password breach may have helped particularly the North American business, whether you saw a change in metrics coincident to that in late April, and if so, as it sustained through the second quarter into 3Q? And then secondly, as we are thinking about how One Playbook manifests itself to consumers in EMEA particularly, would it just simply be the expansion of Deal Bank, because that’s the biggest output of One Playbook, and are there other put you to highlight for us to monitor? Thanks.

Thanks Scott. So first on the password breach, I don’t know exactly, I don’t know whole lot of details about how, what -- how that is exactly effected LivingSocial. I do know that our growth rate throughout the quarter was steady. In North America, which I assume is what you are referring too, we did see an acceleration. We did grow from 37% to 45%, that growth happened, I would say, fairly evenly throughout the quarter. So I don’t and we continually track kind of our market share versus a variety of competitors and that’s been kind of relatively slow and stead progress. So I don’t think there is anything in particular that was big evident to us.

On One Playbook, definitely Deal Bank and Active Deal is one indication, but One Playbook is about merchant and customer experience. So the merchants would get better tools like merchant center that we make it frictionless for them to work with us, the adoption of merchant interest should go up and customers should see more high quality deals, which are much more relevant to them than would have seen otherwise and those are the two big areas we need worry about. But the beauty about this business is doing the small things right in a consistent way to delight the merchants and customers. So one playbook would do lots of small things right to improve customer experience and merchant experience.

And I will just maybe add that one of the things that we discussed when we gave our guidance in the quarter we are still in the midst of this migration from our only daily deal e-mail routes and one of those that we're still dealing with is that today very often in North America when you subscribe and -- when you subscribe to Groupon, you subscribe to a city. So in summer months especially given that our customer base is skewing more -- skewing more female. As people are traveling because they've got families and they're just traveling in the summer months, they're getting push e-deals in a city in which they are not in and the mobile app is still not saying, okay you're a Chicago subscriber but you are in Boston, let me show you deals around you in Boston. So this represents a big opportunity for us and so what I would say is you want to get to the point that our consumers, especially probably in mobile world that no matter where they are Groupon is curating for them unbeatable deals such that they're coming to our mobile apps or coming to our site via mobile and they are seeing things that are relevant to them, we know what they like, we know where they are. And we're finding a way to kind of curate and manage the retail world around them in a way that they can understand and engage with. And hopefully you'll see that.

Our next question comes from Mark Mahaney of RBC.

I just want to ask a question about this, how -- if there is any change in revolution thinking regarding shipping logistic for the – in support of the direct goods business. Eric as you’ve kind of done the overview of the company, is that something that -- you think about the pace and the amount of investment you want to put into that, where are you thinking about now, just the overall pace and level of investment in the shipping and logistics?

Yeah I'll start and maybe Kal could talk a little bit about the details -- some more thoughts in terms of distribution centers. But look, the goods business is a fantastic business and as Jason has mentioned historically we have very high take rates in goods. But we also are unfortunate. Because the business is so young, this is only a 18-month year business, we have very high cost. And so our cost for fulfillment, distribution, warehousing, logistics is still very high, disproportionably high relative to other large scale e-commerce companies. And so we're very focused and our consumer experience is still not at the par. We're still getting product in our consumers’ hands in seven plus days very often instead of two, three or four, which has become much more standard. So we're very focused on taking this amazing business goods and operating in a way that's world class. And some of these investments that we're making which unfortunately for us aren't that big are all part of that process.

Yeah, so like Eric said, the way to think about that is our warehouse fulfillment process like almost two times of what the scale e-commerce company would have. So definitely by focusing on the warehouse and fulfillment, we will reduce costs, but more importantly we'll improve customer experience by shifting the products to the customers in a much shorter timeframe. And the beauty is warehouse build would be complete and also our facilities which will handle hundreds of SKUs, not storage facilities which will have millions of SKUs. And we will do predominantly like Eric said to improve customer experience, because that is the right thing to do. And it's a small investment, which would benefit Groupon in the long term.

Ladies and gentlemen that does conclude our program for the evening. We’d like to thank you for your participation. You may disconnect your lines at this time. Have a great day.