Chegg, Fending Off Rivals, Overhauls Textbook Rental Site to Include Class Scheduling and Homework Help

3/24/11Follow @wroush

Chegg, one of the first movers in the online textbook rental business, has attracted some tough competitors like BookRenter, so it can’t afford to stop innovating. And this week the company is out to show that it hasn’t.

The Santa Clara, CA-based startup today unveiled an overhauled website that ties its rental business together with two recently acquired services, CourseRank and Cramster. Now Chegg’s collegiate customers will be able to peruse course catalogs, see ratings for professors, add classes to their schedules, and get homework help from the same site where they get their books. Chegg CEO Dan Rosensweig says the overhaul is a bid to put the venture-backed company’s brand in front of college students every day, rather than just the “maybe four days a semester” when they’re ordering and returning books.

CourseRank, which offers a directory of courses at 600 college campuses, is free; Cramster, the tutoring site, is a freemium service with tiered pricing that kicks in after the first 14 days. By integrating the three services with its catalog of 4.2 million textbooks, Chegg has built “the beginnings of a platform to personalize around the student, the course, and the school,” says Rosensweig. “This is the beginning of the opportunity for us to be more relevant more often.”

As we’ve reported, archrival BookRenter also has plans to use turn its rental operation into a platform for reaching students with more products and services, including e-textbooks that might be available by the chapter. The San Mateo, CA-based startup just raised $40 million to beef up its operations and go after its larger competitor. Chegg is comfortably ahead in this race—its customer base is about five times larger than BookRenter’s, and Chegg has raised at least $150 million all told—but Rosensweig says the company must keep reinventing itself. “What I’ve learned in my 10 years in Silicon Valley is that if you don’t continue to innovation and build and invest, somebody else is going to come around and build something,” says Rosensweig, who has been CEO at Chegg for about 13 months.

While six-year-old Chegg may look from the outside like a textbook rental company, its larger mission has always been to help students “save time, save money, and get smarter,” Rosensweig says. The ability to rent a textbook for just one semester for a third or less of the cover price has “for obvious reasons become an extremely popular proposition,” he says. Most of the company’s capital so far has gone to buying books and building the Web-based platform that allows students to order them from the company’s Kentucky warehouse. But now it’s enhancing that platform with technology acquired last year from CourseRank and Cramster. Tabs for the two services appear at the top of the new Chegg website, right alongside the “Rent Textbooks” tab.

CourseRank was created by five students at Stanford’s Graduate School of Business. “What they have built is a service that lets students rate their professors, read the ratings, actually schedule their class, and find out who else is in the class,” says Rosensweig. “It’s the beginning of a social education platform, if you will. So now Chegg is also in the business of helping students figure out the most efficient class schedule, with the right kind of competitiveness and the right people in the class.” By the fall, CourseRank will include full course catalogs for 1,000 campuses across the U.S., Rosensweig says.

Cramster is a network of students and educators who can help users with actual class work. Founded in 2003 and based in Pasadena, CA, the operation has online modules that walk users through the solutions to the problem sets included with hundreds of textbooks, as well as a Q&A section where students can get help directly from experts. Cramster “doesn’t just give them the answer, but helps them learn how to solve the problem,” Rosensweig says.

But there’s more to the integration of Chegg, CourseRank, and Cramster than is apparent from the new site, according to Rosensweig. “It’s not just a new look and feel—what won’t be obvious is the significant investment in the technology underneath,” he says. For example, now that Chegg knows which courses CourseRank users are registered for, it can instantly show them the textbooks assigned for those courses, boosting its rental business. “Each of these things jump-starts the others.”

Rosensweig emphasizes that the Chegg platform isn’t complete, and that the company will continue to add services that make students’ lives easier, even as it prepares for the day when e-textbooks finally kill off its physical textbook rental service. “We entered this business fully understanding that in however many years, print textbooks are going to evolve into digital,” he says. “I think you should view Chegg more like a Netflix or an Amazon. When Amazon launched, it was the world’s largest bookstore, but I don’t think anybody believed for one second that it was just going to be a bookstore. [Chegg] is not about the textbook rental business, it is about creating value for students—and the more value we can create, the more business we will have.”

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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