Chegg 2014 Annual Report Download - page 52

Table of Contents
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• our ability and our fulfillment partner's ability to accurately forecast and respond to student demand for
textbooks;
• the pricing of our textbooks for rental or sale in relation to other alternatives, including the textbook prices
offered by publishers or by other competing textbook rental providers;
• the quality and prices of the digital offerings that we offer to students compared to those of our competitors;
• our ability to engage high school students with our College Admissions and Scholarship Services;
• changes in student spending levels;
• the effectiveness of our sales and marketing efforts;
• our ability to introduce new products and services that are favorably received by students; and
• the rate of adoption of eTextbooks and our ability to capture a significant share of that market.
If we do not attract more students to our connected learning platform and the products and services that we offer or if
students do not increase their level of engagement with our platform, our revenue may grow more slowly than expected or
decline. Many students use our print textbook service as a result of word-of-mouth advertising and referrals from students who
have used this service in the past. If our efforts to satisfy our existing student user base are not successful, we may not be able
to attract new students and, as a result, our revenues will be adversely affected.
If we fail to convince colleges and brands of the benefits of advertising on our platform or to use our marketing services, our
business could be harmed.
Our business strategy includes increasing our revenue from enrollment marketing services and brand advertising.
Colleges and brands may view our connected learning platform as experimental and unproven. They may not do business with
us, or may reduce the amounts they are willing to spend to advertise with us, if we do not deliver ads, sponsorships and other
commercial content and marketing programs in an effective manner, or if they do not believe that their investment in
advertising with us will generate a competitive return relative to other alternatives. Our ability to grow the number of colleges
that use our enrollment marketing services and brands that use our brand advertising, and ultimately to generate advertising and
marketing services revenue, depends on a number of factors, including our ability to successfully:
• compete for advertising and marketing dollars from colleges, brands, online marketing and media companies and
advertisers;
• penetrate the market for student-focused advertising;
• develop a platform that can deliver advertising and marketing services across multiple channels, including print,
email, personal computer and mobile and other connected devices;
• improve our analytics and measurement solutions to demonstrate the value of our advertising and marketing
services;
• maintain the retention, growth and engagement of our student user base;
• manage legal developments relating to data privacy, advertising or marketing services, legislation and regulation
and litigation;
• strengthen our brand and increase our presence in media reports and other publicity companies that utilize online
platforms for advertising and marketing purposes;
• create new products that sustain or increase the value of our advertising and marketing services and other
commercial content;
• manage changes in the way online advertising and marketing services are priced; and
• weather the impact of macroeconomic conditions and conditions in the advertising industry and higher education
in general.
We intend to offer new products and services to students to grow our business. If our efforts are not successful, our business
could be adversely affected.
Our ability to attract and retain students and increase their engagement with our platform depends on our ability to
connect them with the product, person or service they need to save time, save money and get smarter. 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. For example, we acquired our
tutoring service in the acquisition of InstaEDU in June 2014 and our internships service in the acquisition of Internships.com in
October 2014. The markets for these new products and services may be unproven, and these products may include technologies
and business models 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