Textbook Renter Chegg Braces for Digital Future
It was the right idea that maybe came too late — to rent (rather than sell) textbooks to cash-strapped students. Chegg CEO Dan Rosenweig said he knew it from the start.
"When we took over the business three years ago, it was clear that print textbooks and the rental model wouldn't be around forever, as the world goes increasingly digital," he said.
The e-textbook would surely reign, probably sooner than later.
Rosenweig, former chief operating officer at Yahoo, said the focus is now much more broadly serving the needs of students: "Our mission is to save them time, save them money and get them smarter." Already, he said, some 20 percent of revenue comes from something besides printed books.
As a student network, he said, it's more similar to professionally oriented Linked In than socially oriented Facebook.
"We have high school students who come into the network," Rosenweig said. "We can match them with scholarships, we can help them pick their classes, pick their professors."
The Chegg website also offers "24/7 expert study help" and "step-by-step textbook solutions."
Still, with some required course textbooks running well above $100, the rental business continues to thrive.
"We've set record days for shipments the last couple of days because it's now back in the January semester," he said. "We've gotten so proficient at it that we can get millions of books back and turn them around in four hours."
But with the digital writing on the wall, Rosenweig stressed: "Three years ago, we had one line of business. Now we have three lines of business: We have the print textbooks, digital technology and educational services, and then we have the advertising business."
"We think this is one of the biggest markets out there," he said. "In the U.S. alone there are 20 million college students. So we have the college students, we have high school students trying to get into college, we have the global opportunities. We're really at the beginning of our opportunity."
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