Chegg 2013 Annual Report Download - page 73

experienced fluctuations in search result rankings in the past, and we anticipate similar fluctuations in the future.
Any reduction in the number of students directed to our website could harm our business and operating results.
Our core value of putting students first may conflict with the short-term interests of our business.
We believe that adhering to our core value of putting students first is essential to our success and in the best
interests of our company and the long-term interests of our stockholders. In the past, we have forgone, and in the
future we may forgo, short-term revenue opportunities that we do not believe are in the best interests of students,
even if our decision negatively impacts our operating results in the short term. For example, we offer free
services without advertising to students, such as our Courses service that require investment by us, in order to
promote a more comprehensive solution. As part of our College Admissions and Scholarship Services marketing
efforts, we identify select partner organizations who offer complementary content and services that support
students in exploring colleges. We enable these partner organizations to use our college match service through
their websites to enable students to request information about colleges of interest. We also developed The Chegg
for Good program to connect students and employees with partners to engage them in causes related to education
and the environment. We work with the nonprofit conservation organization American Forest to plant trees
around the world and our funding has enabled the planting of more than five million trees to date and we formed
the Chegg Foundation, a California nonprofit public benefit corporation, to engage in charitable and education-
related activities, which we will fund with one percent of the net proceeds from our IPO in November 2013. Our
philosophy of putting the student first may cause us to make decisions that could negatively impact our
relationships with publishers, colleges and brands, whose interests may not always be aligned with ours or those
of our students. Our decisions may not result in the long-term benefits that we expect, in which case our level of
student satisfaction and engagement, business and operating results could be harmed.
If we are required to discontinue certain of our current marketing activities, our ability to attract new students
may be adversely affected.
Laws or regulations may be enacted which restrict or prohibit use of emails or similar marketing activities
that we currently rely on. For example:
• the CAN-SPAM Act of 2003 and similar laws adopted by a number of states regulate unsolicited
commercial emails, create criminal penalties for emails containing fraudulent headers and control other
abusive online marketing practices;
• the FTC has guidelines that impose responsibilities on companies with respect to communications with
consumers and impose fines and liability for failure to comply with rules with respect to advertising or
marketing practices they may deem misleading or deceptive; and,
• the TCPA restricts telemarketing and the use of automated telephone equipment. The TCPA limits the
use of automatic dialing systems, artificial or prerecorded voice messages and SMS text messages. It
also applies to unsolicited text messages advertising the commercial availability of goods or services.
Additionally, a number of states have enacted statutes that address telemarketing. For example, some
states, such as California, Illinois and New York, have created do-not-call lists. Other states, such as
Oregon and Washington, have enacted “no rebuttal statutes” that require the telemarketer to end the
call when the consumer indicates that he or she is not interested in the product being sold. Restrictions
on telephone marketing, including calls and text messages, are enforced by the FTC, the Federal
Communications Commission, states and through the availability of statutory damages and class action
lawsuits for violations of the TCPA.
Even if no relevant law or regulation is enacted, we may discontinue use or support of these activities if we
become concerned that students or potential students deem them intrusive or they otherwise adversely affect our
goodwill and brand. If our marketing activities are curtailed, our ability to attract new students may be adversely
affected.
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