Chegg 2013 Annual Report Download - page 63

Part of our strategy is to offer students new products and services in an increasingly relevant and personalized
way. We may develop such products and services independently, by acquisition or in conjunction with
developers and other third parties. The markets for these new products and services may be unproven, and these
products may include technologies with which we have little or no prior development or operating experience or
may significantly change our existing products and services. If our new or enhanced products and services fail to
engage our students, or if we are unable to obtain content from third parties that students want, we may fail to
grow our student base or generate sufficient revenue, operating margin or other value to justify our investments,
and our business may be adversely affected. In the future, we may invest in new products and services and other
initiatives to generate revenue, but there is no guarantee these approaches will be successful. Acquisitions of new
companies and products creates integration risk, while development of new products and services and
enhancements to existing products and services involves significant time, labor and expense and is subject to
risks and challenges including managing the length of the development cycle, entry into new markets, integration
into our existing business, regulatory compliance, evolution in sales and marketing methods and maintenance and
protection of intellectual property and proprietary rights. If we are not successful with our new products and
services, we may not be able to maintain or increase our revenue as anticipated or recover any associated
development costs, and our financial results could be adversely affected.
If our efforts to build a strong brand are not successful, we may not be able to grow our student base, which
could adversely affect our operating results.
We believe our brand is a key asset of our business. Developing, protecting and enhancing the “Chegg”
brand is critical to our ability to expand our student base and increase student engagement with our platform. A
strong brand also helps to counteract the significant student turnover we experience from year to year as students
graduate.
To succeed in our efforts to strengthen brand identity, we must, among other activities:
• maintain our reputation as a trusted source of content and services for students;
• maintain the quality of and improve our existing products and services;
• continue to introduce products and services that are favorably received;
• adapt to changing technologies;
• protect our students’ data, such as passwords, personally identifiable information and credit card data;
• protect our trademark and other intellectual property rights;
• continue to expand our reach to students in high school, graduate school and internationally;
• ensure that the content posted to our website by students is reliable and does not infringe on third-party
copyrights or violate other applicable laws, our terms of use or the ethical codes of those students’
colleges;
• adequately address students’ concerns with our products and services; and
• convert and fully integrate the brands and students that we acquire, including the Zinch brand and the
students who use Zinch.com, into the Chegg brand and Chegg.com.
Our ability to successfully achieve these goals is not entirely within our control and we cannot assure you
that we will be able to maintain the strength of our brand or do so in a cost effective manner. Factors that could
negatively affect our brand include:
• changes in student sentiment about the quality or usefulness of our products and services;
• concern from colleges about the ways students use our content offerings, such as our 24/7 Online Study
Help service;
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