Chegg 2015 Annual Report Download - page 54

Table of Contents
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If our efforts to attract new students to use our products and services and increase student engagement with our connected
learning platform are not successful, our business will be adversely affected.
The growth of our business depends on our ability to attract new students to use our products and services and to
increase the level of engagement by existing students with our connected learning platform. The substantial majority of our
revenues depends on small transactions made by a widely dispersed student population with an inherently high rate of turnover
primarily as a result of graduation. Many of the students we desire to attract are accustomed to obtaining textbooks through
bookstores or used booksellers. The rate at which we expand our student user base and increase student engagement with our
connected learning platform may decline or fluctuate because of several factors, including:
• our ability and Ingram's ability to consistently provide students with a convenient, high quality experience for
selecting, receiving and returning print textbooks;
• our ability and Ingram's ability to accurately forecast and respond to student demand for print 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 our offerings compared to those of our competitors;
• the rate of adoption of eTextbooks and our ability to capture a significant share of that market;
• our ability to engage high school students with our College Admissions and Scholarship Services, Chegg Tutors
and Chegg Test Prep;
• changes in student spending levels;
• changes in the number of students attending college;
• the effectiveness of our sales and marketing efforts; and
• our ability to introduce new products and services that are favorably received by students.
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 revenues 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 business will be adversely affected.
If our efforts to build a strong brand are not successful, we may not be able to grow our student user 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 user base and increase student engagement with our connected learning platform. A
strong brand also helps to counteract the significant student turnover we experience from year to year as students graduate and
differentiates us from our competitors.
To succeed in our efforts to strengthen our brand identity, we must, among other activities:
• maintain our reputation as a trusted source of textbooks, content and services for students;
• maintain the quality of and improve our existing products and services;
• maintain and control the quality of our brand as we transition to Ingram for our textbook fulfillment logistics;
• introduce products and services that are favorably received;
• adapt to changing technologies;
• adapt to students’ rapidly changing tastes, preferences, behavior and brand loyalties;
• protect our students’ data, such as passwords and personally identifiable information;
• 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 Internships.com brand and the
students who use Internships.com into the Chegg brand and Chegg.com.
Our ability to successfully achieve these goals is not entirely within our control and we may not 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: