Chegg Investing to Expand Beyond Books: Rosensweig

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Nov. 13 (Bloomberg) -- Dan Rosensweig, president & CEO at Chegg Inc. talks with Jon Erlichman about the company’s $187 million IPO, their business model and growing the company to achieve profitability. He speaks on Bloomberg Television’s “Bloomberg West.”

Profit.

We spoke earlier today to the ceo and i asked him how the ipo affected demand for check -- chegg's offering.

I think the costello has been a really good job.

I think people are focused on good category leaders and bad category leaders.

The opportunity is so much bigger looking forward than it is backwards that they are excited about these offerings right now.

You told us before on "bloomberg west does quote chegg -- "bloomberg west" chegg is a highly profitable business.

You said there was no guarantee of profitability in the future.

Do you want to be profitable?

Of course we do.

That is not the issue.

When you're going after a trillion dollar market opportunity like education, and in just 3.5 years we have expanded from doing textbooks for college gets to high school kids, and now we are doing college recruitment and get commit -- get kids connected to the right schools and get them required materials and nonrequired materials.

We have expanded so dramatically, and the opportunities have got not much bigger.

We are investing for the future.

All of our businesses are growing close to 100% and have 80 corporate -- 80% gross margins.

The future growth is a much higher growth, higher margin business.

And we believe print will go away in a couple of years.

But -- does dan rosen worry about amazon?

He worried about everything.

In the required text the business, demand is generated by the publishers.

It is very difficult for someone to get a license to give everything away for free, which amazon has historically tried to do.

The demand is created by the publishers.

We do not think that will be an issue when he goes digital.

Plus, we are helping the kids pick their classes and we will roll out more and more services over time.

Amazon has been in the market for a wild.

They are a tremendous company, but you saw in quarter three that are units grew seven percent year-over-year just in that part of our business.

Right now, we are able to compete very effectively and we think others are worried about how to compete with us.

Acquisitions have helped to broaden this business.

How much money has been earmarked as part of this offering for future acquisitions?

One of the things the best companies have our straub -- strong balance sheet.

We have the leverage not only of currency, but of capital.

And as we need capital for the textbook business, because we have become so efficient at it, we are armed to make smart acquisitions when they are available.

You can look at it and say, can we grow into a whole new category?

We opened up a high school category and that is growing at 100% per year.

Or the class scheduling, which over one million students use, which allows them to get the required reading material more efficiently.

You can see our annual year- over-year marketing dollars going down.

We have earmarked -- we have not earmarked a dollar amount, but now that we have a better balance sheet, we will use it effectively to grow for our shareholders and our students.

Apple is spending billions to

This text has been automatically generated. It may not be 100% accurate.

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