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eBook Review – Chegg – The Update

The last time I checked in on the eTextbook platform at Chegg, it was February of this year; what a difference six months has made! While the original system was impressive, the changes are even more so and they are going to help set Chegg apart in the digital arena. Here’s what’s up:

iPhone Reader: Taking advantage of the retina display on iPhone, the new-and-improved Chegg app now has a direct tie to the eTextbook platform. This experience is fully optimized and provides a crisp-and-clean interface that is easy to navigate and easy on the eyes. Want to take it for a spin? The app has a sample eTextbook, so try it for yourself. Let me know what you think.

Notepad: In the first review, I mentioned the notes feature, but the new notepad is a totally revised experience. Clip a quote, grab a picture, or insert a Wikipedia definition into your note page and start a digital record of the notes and parts of the book you find most interesting. This is particularly helpful when going back to study for a test.

Homework Help: The old system had a Q&A component. The new system has deep integration with the Homework Help social interaction that Chegg is really promoting this fall.

Highlights: When I buy a used book, I typically look at the highlighting from the previous owner to see if s/he did a good job calling out useful content. The new highlight feature in Chegg tech allows you to see passages of the book that have been highlighted by other users. I thought this was a great use of digital content, kind of like getting the wisdom of all others who have used the same text.

While You Wait: While this isn’t a feature of the digital book itself, it is a nice feature of the larger process. Now when you order your textbook rental, if you are worried the book will not arrive by the first day of class, you can pay $0.99 to get a digital copy of the book for seven days while you wait for the print copy.

Chegg is setting the bar high for eTextbooks. As I have mentioned in past posts, Chegg needs a digital strategy to ensure its future now that it has serious competition from many rental companies trying to emulate what Chegg started a few years ago. You can tell by recent updates that the folks at Chegg get it, that they understand that they cannot rest upon their rental laurels and that they must continually innovate and that such innovation must come in the form of an interactive digital hub that is mobile friendly.

Chegg – Internet Study Hall – Banking on the Future

If you’ve been following Chegg as I have, you’ve seen a company grow and nimbly stretch in many different directions in attempts to innovate. Chegg has evolved from a classifieds website into a textbook-rentals giant. When Chegg entered the textbook rental market, well . . . there was no market and they shaped the game. Sure, it could be argued that Book Renter (Rafter) and Campus Book Rentals were on the scene and rentals were occurring on campus, but it was nothing like we see today and Chegg deserves a lot of the credit for the ubiquity of rentals now.

As the Chegg engine grew and more competitors entered the rentals marketplace, company decision-makers knew that they need to be something more than just a rentals company. The market was begging for a solution to eBooks. While I don’t think eBooks are necessary right now (they represent just 3-5% of textbooks sales in higher education), it is clear that a digital strategy (beyond eBooks) is necessary going forward. Chegg made some serious investments into digital, and as I have discussed in my earlier reviews, the results are pretty impressive.

What is just as impressive is how the company is starting to put together the “social graph” they have been discussing for over a year. This endeavor began as Chegg started making several acquisitions, including Cramster, Student of Fortune, NoteHall, and Zinch. It seemed they were buying ambitious one-offs focused on additional learning materials, and the overall picture of how they would integrate users into a single interface or provide a single product was a bit unclear.

Earlier this year Chegg showed the fruits of their acquisitive and integrative labor in the form of the new Chegg website that allows students to plan classes, get homework help, interact with classmates and peers using the same materials, and of course rent textbooks. So the question here was really one of “We built it, will they come? Is this a product that students desire or is it technology folly for marketing and programming departments?” It seems that the answer is that students do want this, overwhelmingly so.

According to a recent survey released by Chegg (source: PR Newswire), students are collaborating both in person and online and interested in doing so even more. Some numbers:

Students are collaborating both in person and online.

  •  47% plan to or are considering using an online study group in the upcoming school year.
  • 40% would be very or extremely likely to use an online study group.
  • 51% would be likely or extremely likely to chat online with an expert in real time to answer questions.
  • The number of students planning to use online tutoring or homework help this school year is expected to double from last year.
  • The number of students who might try online tutoring or homework help next year will increase 5X.

The need for education-focused technology tools is exploding.

  •  64% would be very likely or extremely likely to use an online assistant that automatically compiles study materials for each class.
  •  45% would be very or extremely likely to use online courses.
  •  44% would be very likely or extremely likely to use an app store for finding learning tools.
  •  39% said online study guides are very helpful.

Interactive content is the next frontier in education.

  •  67% said they would be very or extremely likely to use video tutorials that explain difficult concepts.
  •  62% would be very or extremely likely to use audio lectures of their class supplemented with lecture notes and highlights.
  •  32% said interactive simulations of concepts are very helpful.

Chegg is banking on these numbers turning into sales, memberships, and revenue. If so, the social graph will be complete and Chegg will have demonstrated its ability to generate revenue in a year-round model, something that others have tried to do in the past but failed.

Meet Chegg – The College Hub

Over the past three years, both education insiders and venture capitalists have watched with interest as Chegg has grown and developed. In 2010, the company raised more than $140 million, spending an estimated $50 million of that money on six acquisitions over a two year time period. But where was the textbook-rentals company going?

When Chegg leapt onto the scene and pioneered the textbook-rental market, the company effectively changed the market, and reports now estimate that rentals represent 15-20% of all textbook purchases. With new players entering the field, the ability to grow a company through this channel was slowly closing and this young company had to find a way to reinvent itself.

The addition of Dan Rosenweig, he of Yahoo! and Guitar Hero, set to transform the company from a one-trick rental pony to a college hub assisting students with scheduling classes, finding tutors, sourcing affordable textbooks, completing difficult assignments, and more. Beginning this week, students will get a look into the new

The release started with an article in Business Week  and was followed up with a personal invitation from Mr. Rosenweig to all current Chegg customers in the Chegg Salad email newsletter. It’s too early to tell if students will embrace the Facebook-like cloud and social features that allow them to store all their course information in one single place, but the move is significant as it positions Chegg to provide all the services form the companies they have acquired all in one single location.

A look back at past posts on Chegg
eBook Review: Chegg
What Going on At Chegg
Chegg Addresses Final Pieces to the Puzzle
Chegg Makes Big Moves to Reposition Itself

Dispatch From the Trenches: January 2012 Compete Numbers was updated yesterday to display numbers for January. Here are some of the numbers that I looked at.

2011 2012 % Change
Amazon 78,383 88,422 12.8% 2,665 2,649 -0.6%
Chegg 1,287 1,581 22.8% 1,390 1,567 12.7% 1,729 1,456 -15.7% 889 1,035 16.4% 717 591 -17.5%
CourseSmart 392 368 -6.1%
Bookrenter 329 347 5.4%
CollegeBookRenter 206 252 22.3%
ValoreBooks 379 244 -35.6%
CampusBookRentals 184 144 -21.7%
KnetBooks 0 71 <100% 36 52 44%

All numbers reprsent vistors in thousands

As with all stats you have to take these with a grain of salt. I have heard people argue they are accurate and inaccurate. When looking at the numbers for, they were in-line with what we say in January. If nothing more they can provide a way to show the overall industry and how one merchant ranks compared to another.

Chegg makes big moves to reposition itself


But what does this mean for the industry, competitors, and a possible IPO?

Late last week, in a press release entitled “Chegg Expands Beyond Textbook Rental Industry; New Educational Services Include Class Scheduling and Homework Help,” the textbook-rental giant discussed its expansion into other educational areas such as homework help and class selection. While many news sites simply reprinted the story, I dug deeper to look at what Chegg has done and the bigger-picture ramifications. 

Let’s start with some history: In early 2010, I made a prediction (and since it never came to fruition, I’m off the hook for having to prove that I made it!). I was positive that Chegg was going to purchase a large marketplace website. To me, it made perfect sense and was a natural fit: if a rental company owned a big marketplace, the company would have access to all of the sellers and most of the inventory, essentially creating a ready-made drop-ship fulfillment model. And in some senses, this has played out, though not exactly as I envisioned. The changes manifested in the form of websites such as providing textbook-rental sites (and other sites as well) with access to the inventory data without the rental sites having to build (or buy) any of the infrastructure.

Based on observations and predictions, I posit that in order for Chegg to go public (the direction in which it the company is apparently headed), Chegg must address three main points:
 1) How it would obtain inventory
 2) How it would engage students during the school year
 3) How it would handle the emergence of eTextbooks
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