SAN FRANCISCO Aug 4 Chegg Inc, an
Internet company that rents textbooks and provides other student
services, announced a partnership with a distributor that will
allow it to reduce its inventory of print books and focus on its
growing digital business.
Shares of Chegg were up 16 cents at $6.05 in extended
trading on Monday.
Chegg said that Ingram Content Group Inc will supply a
growing portion of the college textbooks that Chegg sells to
students, with Chegg taking a roughly 20 percent commission on
each sale. The move will allow Chegg to save $25 million over
the next six months.
Chegg will use the savings to focus on initiatives with more
attractive growth and profit margin potential, Chief Executive
Dan Rosensweig told Reuters in an interview ahead of the
In the second quarter, the Santa Clara, California-based
company announced a net loss of $8.2 million, or 10 cents a
share. Excluding certain items, Chegg said its earnings per
share were breakeven. Revenue of $64.5 million was up 15 percent
With Chegg's school textbook rental business facing
competition from Amazon.com Inc, the company has been
expanding into other services aimed at high school and college
students. In recent months, Chegg has acquired companies that
provide students with tutoring services and coupons.
(Reporting by Alexei Oreskovic; Editing by Jonathan Oatis)