Ms. Peluso (Photo: Working World)

Earlier this afternoon, Gilt Groupe named a new CEO to replace founder (and current CEO) Kevin Ryan. Michelle Peluso, formerly the president and CEO of Travelocity, will take the top slot at the flash deals site beginning in February. Ms. Peluso, who currently serves as the chief marketing and Internet officer at Citigroup, is also the only outside member of Gilt Groupe’s board who isn't an investor. She joined the board in October 2009.

"There aren’t that many people that you would trust to become CEO of a company that you’ve spent five years building and that has a thousand people," Mr. Ryan told Betabeat by phone. "She’s always been my first choice. But in the process, midway through, you can’t say ‘Oh my God, I really want Michelle,' because she hasn’t said yes yet; we haven’t made an offer yet.”

The news comes on the heels of swirling rumors that Gilt was looking for an IPO-friendly CEO to replace Mr. Ryan. At the time, a source close to the company told Betabeat that it was never Mr. Ryan's intention to stay on as CEO. Mr. Ryan will continue working closely with Gilt, returning to his previous role as chairman, but shift his focus to other fast-growth companies in the AlleyCorp network: Business Insider and 10Gen. Ms. Peluso will be the third CEO in four years, following Mr. Ryan and Susan Lyne, who stepped down to the chairman spot in 2010, swapping roles with Mr. Ryan.

"So I actually approached Michelle a year ago. One of things I do is that I’m thinking about recruiting all the time," Mr. Ryan said, noting his attempt to hire away a woman in charge of suite sales for the Jets after attending a game seven months ago. "Fast forward, she works at Gilt City today."

Gilt has had a fair amount of difficulty expanding its business in recent years. Its forays into full-price menswear and travel didn't pan out, with its travel vertical Jetsetter now for sale for around $50 million. Back in January, the company laid off 90 employees, closing Gilt City offices in six different markets.

Mr. Ryan said that part of Ms. Peluso's appeal is that "the managing team really likes her." During the search process, he interviewed former employees of hers who said the same thing. "That was important to me," said Mr. Ryan, who let go of Jetsetter CEO Drew Patterson back in May.

Another factor in Ms. Peluso's appointment was her experience with different-size companies. "Here’s a hard thing when you look for someone in this spot. You want someone who has entrepreneurial energy and focus and moves quickly. At the same time, we’re not a 20-person company, we’re a 1,000-person company and with global operations. So you need to have that big company structure and thought process, but not slow you down--and that’s a weird hybrid," he said. "I’ve interviewed people from big companies and I’m like: oh my God, they’re going to be a disaster here. They’re gonna wanna take too long on everything. And yet people can be too sloppy if they just come from startups."

In contrast, Ms. Peluso had sold her travel company Site59 to Travelocity for $43 million in 2002. Her startup was "sort of like a Jetsetter, actually," Mr. Ryan said. "The unusual thing is that they made her the CEO of Travelocity, which is a 5,000-person company!"

Was Ms. Peluso's marketing background ideal in light of Gilt's expected IPO road show? "The most important thing is that you run a good company," Mr. Ryan insisted. "Because you can be a terrible presenter, but if you show up and you have great results, you know public investors will love you. Second thing, you’re right though, is being able to present well."

In January of this year, Mr. Ryan had predicted an IPO for Gilt in the fourth quarter of this year or 2013. That timetable has been delayed. In an interview with AllThingsD, Mr. Ryan mentioned Zynga and Groupon's performance in the public markets with some distaste. He told Betabeat that because Ms. Peluso won't join until next year. "She needs to be here a couple months before we can make the decision and say go," he said, predicting an IPO by either end of next year or the end of 2014. "If I had to refine it, I’d say end of 2014," he added.

"Look no one loves the prospect of going public for all the obvious reasons," Mr. Ryan acknowledged. "On the other hand, it’s inevitable that any company I’m in--if they get really big--either they sell or have to go public. You need to get liquidity at some point." However, he added, "It depends on your alternatives. I think in Gilt's case going public is the best option. If someone walks up tomorrow and says, 'Here’s $10 billion,' I’ll call you up and say, 'Guess what? I got a better option!"

As for the impending sale of Jetsetter, everything is on schedule, Mr. Ryan said, with binding bids due in the next two weeks of December. "You never quite know whether you get zero bids or five bids," he said. "But so far the right things are happening, and that would close in the first quarter."

Mr. Patterson via @jetsetdrew

Gilt Groupe founder Kevin Ryan and chairman Susan Lyne spent Monday at the offices of Jetsetter, a deals site for luxury travel that operates independently under the Gilt Groupe umbrella. When the day was done, the Jetsetter board, where Mr. Ryan serves as chairman, approved a bold decision in response to an exodus of six senior executives and pervasive frustration among Jetsetter's nearly 90 employees. "More than half of us are looking to leave within the next month, at which point the business won't be operational," a Jetsetter employee told Betabeat last week, recounting "mutiny" among staffers.

"Drew [Patterson, the company's CEO and cofounder] is going to step down effective immediately," Mr. Ryan told Betabeat by phone this morning. In his stead, Mr. Ryan named Rob Deeming, Gilt Groupe's director of strategy and operations, and Mr. Ryan's former "chief of staff," as acting general manager of Jetsetter. Mr. Deeming had been in charge of Jetsetter's UK office, which was launched last September.

Mr. Ryan said the change at the top was motivated by turnover and morale. "Too many people have left. When you’re the CEO, you’re responsible for that. We’ve had a lot of communication over the last six months on this issue. At a certain point, for myself, you make a change."

Interviews with staffers, who spoke under condition of anonymity last week, painted the picture of a company hampered by Mr. Patterson's and CTO Colin Kroll's unwillingness to listen to and implement other people's ideas--at the expense of employees eager to grow the brand. The initiatives that the duo had put forward, such as a UK office, had flopped, sources said. "They talk to themselves and they think they're smarter than everybody, but they don't know how their customer works," said another Jetsetter staffer, referring to Mr. Patterson and Mr. Kroll. "We have great members, we want to keep them happy."

The way some employees tell it, morale started nose dive around the time Barry Herstein, the company's first-ever chief marketing officer, left Jetsetter. Mr. Herstein, a veteran marketing executive from PayPal, American Express, and the Financial Times Group, had actually been in consideration for the CMO gig at Gilt Groupe. When his appointment was announced last month, Mr. Patterson hailed the opportunity to "get the Jetsetter brand to a larger audience.”

But Mr. Herstein's tenure was short-lived. "Barry started on a Monday, didn't show up for work the following Tuesday and it was announced on Wednesday that he wasn't coming back," said one Jetsetter employee who agreed to speak under condition of anonymity. "He came in and realized all the things that were wrong with the company immediately."

Turnover and disagreement over direction are routine for a startup, but Mr. Herstein was the third highly-respected senior executive to leave Jetsetter this year, following Heather Leisman, the former VP of merchandising and operations and Stephanie Dolgins, the former head of marketing.

Sensing unease among the ranks, two weeks ago, Mr. Patterson broke staffers up into small groups to meet with top executives. Sources say the most successful session, in terms of open dialogue, was with Taleeb Noormohamed, a Canadian entrepreneur brought in to head up Jetsetter's "Homes" division. A week after the meeting, Mr. Noormohamed announced he would be leaving the company as well. "I definitely think Drew was threatened by how much people trust and respect Taleeb. His loss is a huge blow to hope," said one employee. The day of Mr. Noormohamed's goodbye party--for which Mr. Patterson showed up two hours late--employees found out that two more staffers would be leaving as well: Stuart Horowitz, VP of human resources, and Ivana Naeymi-Rad, director of engineering for business platforms. Five minutes after Mr. Patterson arrived at the party, hosted on the roof of the Gansevoort Park Avenue, employees started dispersing. "They all get marginalized, they all get frustrated and they all leave," a source said last Wednesday, adding, "There are about twenty people who are ready to walk out the door tomorrow."

Employees told Betabeat that revenue at Jetsetter was "flat," despite adding new venues, wondering why the board didn't act, despite the fact that there were "no positive signs coming from the company (including financial)." But the company vehemently disputed that claim on the phone. Jetsetter is poised to do close to $100 million in gross bookings this year, a spokesman said, adding that at yesterday's board meeting, Jetsetter reported 16 percent growth year-over-year for this quarter despite an industry-wide lag in the discount offerings. "The travel market is doing pretty well right now, which means there is less discount inventory available," noted Mr. Ryan. Individuals months may have been flat, but never a quarter, said the spokesman.

We had heard that Jetsetter was burning through $500,000 a month, but a company spokesman says Jetsetter has been cash-flow break-even since it was launched, which is unusual for ecommerce companies that normally require a fair amount of cash to build up. Jetsetter was capitalized with $1 million three years ago and hasn't raised since. After that initial raise, neither Gilt nor any outside investors have put money into Jetsetter, says the company. From an accounting perspective, however, Jetsetter still loses a few hundred thousand dollars per month, which is half of what it was six months ago. But the business should cross over into profitability next year, on schedule.

In terms of cash flow, said the spokesman, Jetsetter has been the single best business in all of Gilt.

The company also disputed employee statements that Jetsetter's UK office, one of Mr. Patterson's pet projects, had shut down. "That was a pretty big deal when we opened up another office," said a Jetsetter staffer. "And then to see it fail so quickly was pretty demoralizing for everyone. There’s still some people over there, but we’re no longer really operational in the UK. They’re more there just for the sales side." Jetsetter, on the other hand, says the UK has not closed down and claims the company is in the proces of hiring five more people. Currently, however, the UK office is just there to source deals for the US. Originally, Jetsetter had hoped for an independent UK team to create a business overseas, but found it difficult to get members. The last entry from Twitter account @jetsetter_uk was February 1st.

According to one employee, during a meeting of twenty staffers, Shaun Stewart, VP of sales and operations, suggested that Jetsetter start copying their competitor, Tablet Hotels. The source said Mr. Herstein, the short-lived CMO, asked why Jetsetter wouldn't stick with what it's good at it--beautiful pictures and editorial content--over copying someone else. Jetsetter used to showcase "quality products," said the staffer, "now it's crappy hotels."

Mr. Ryan offered praise for Mr. Patterson's willingess to try new things, contrary to what we had heard from employees. "When Drew came up with the idea of selling full-price hotels a year and a half ago, no one at Gilt had done this and no one in the flash sales space had done this," said Mr. Ryan. "Now it’s 40 percent of our business." Jetsetter also plans on announcing a number of new hotel chains into its offering this coming month, including the recently added Mandarin Oriental. He also spoke highly of Jetsetter's product, especially as compared to its competitors. "The product itself is fantastic. I actually think it’s one of the best products we have at Gilt. It’s won lots of awards. I’m sitting here in the conference room looking at the 2011 Webby award," he said.

"Most of our competitors like RueLaLa or Haute Look that entered the travel space two years ago, either have dropped out or have small businesses," said Mr. Ryan. "Neither one is doing even $15 million in revenue. Ideeli same thing. We all started at about the same time. We have a bigger travel flash sales business than the three of them combined." He also pointed out how a European competitor called Voyage Privé tried to enter the U.S. market a year ago, but "dropped out because they couldn’t compete with Jetsetter in this market."

Ultimately, however, Mr. Ryan's decision to replace Mr. Patterson, a former VP of marketing at Kayak.com, was motivated by the fact that, "There’s been more management turnover for a variety of reasons in a small company than there should be. There’s always some unhappy people everywhere but I think the internal cooperation within Jetsetter is not great between various departments." During the breakout sessions with senior executives a couple weeks ago, Mr. Patterson's staff also blamed low morale on lack of communication, which one source called merely superficial. "It was still a top-down movement of them telling us what was wrong with the company, rather than us telling them what they needed to change," said the source. Mr. Kroll, Jetsetter's CTO who led alongside Mr. Patterson, will be staying in place.

Mr. Ryan said Jetsetter has not yet begun a search for a new CEO. Considering that Voyage Privé is about a $400 million business in Europe, he said, Jetsetter could be expected to approach that as well. "The person in charge, we need to feel comfortable that they can scale this into an international large travel business. It’s too early to learn if Rob is that person," said Mr. Ryan. "But we'll do a search. And my guess is within six months, we’ll have someone new in here from a travel background."

We will be covering this story as it breaks. If you have information about Jetsetter, please contact ntiku@observer.com.

Levo League founders Caroline Ghosn and Amanda Pouchot, who met while working at McKinsey & Company. (Facebook)

Levo League, the professional network for women of Generation Y, sounds like it took a page from Nice Girls Don't Get the Corner Office. "You'e a go-getter," the site says, in stark white-on-black lettering. "Connect with women like you." The New York startup just finished its angel round, collecting $1 million from Susan Lyne, Chairman, Gilt Groupe;  Gina Bianchini, founder and CEO of Ning; Fran Hauser, president of digital for Time Inc.’s style and entertainment and lifestyle groups, and others.

Though the round wasn't raised only from women--Tom Cohen, PTC Advisors and Gen Y Capital Partners, joined as well--it's an unusually high number of lady angels in one place. Women make up “maybe 5 percent, maybe worse” of the 3,100 investors on AngelList, cofounder Naval Ravikant told PEHub in a piece about the dearth of female angels yesterday.

Maybe Levo League will change that. The site is built for "Gen Y professional women" (not sure how the ageism is supposed to help) looking for career opportunities. The site has been in beta since November, when Levo introduced company pages to an invite-only community of "Gen Y women and recruiters." Later this month, Levo will launch a "recruitment and community platform to serve as the ultimate career advancement destination for Gen Y." The Facebook page says "By Gen Y, for Gen Y."

More than 80 companies, including AOL and Bonobos, have signed up for an unspecified fee. Those companies will plumb Levo's profiles of women like a one-way dating site. Given the pedigrees of its investors, we imagine it must be seeded with a decent spread of high-achieving XX chromosomes.

Levo means “to smooth, polish, or otherwise improve” in Latin and is the root of the word “elevate,” according to a press release. The site was originally called Pretty Young Professional. CLARIFICATION: A representative for Levo League wrote in to say that PYP was an "unaffiliated blog" which was started by Levo founders Caroline Ghosn and Amanda Pouchot along with Kathryn Minshew and Alex Cavoulacos (now of Y Combinator's Daily Muse). Read the story of PYP's founding and unfounding at Forbes. Sample quote: "According to one of the founders, Pouchot is an emotional person and taking the pink off the site hurt her feelings."