Chegg is in crisis mode. The online education platform says its website traffic has plummeted since Google launched its AI-powered Overviews tool.
Now, it is exploring strategic alternatives - corporate speak for a potential sale, restructuring, or other major changes.
The company claims Google’s AI uses its content without driving traffic back, pushing users to stay within Google’s platform.
Chegg has also sued Google and its parent Alphabet, accusing them of unfair competition. CEO Nathan Schultz didn’t mince words. “These two actions are connected, as we would not need to review strategic alternatives if Google hadn’t launched AI Overviews,” he is quoted by Bloomberg as saying.
Chegg’s stock tumbled 24% after hours after it said its fourth-quarter revenues had dropped by almost a quarter - reflecting the company's deep malaise.