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Chegg is on its last legs after ChatGPT sent its stock down
- doctorpangloss 2y agoInvent a technology that changes the world, but unfortunately by helping students cheat in the school which you loved. In a sense, the guys doing safe AI already failed out the gate.
- spencerchubb 2y agoThis is just an anecdote, but I'm seeing more ads than ever for chegg, and I'm not in school. Wondering if it's coincidence or a last ditch effort to boost metrics.
- morkalork 2y agoLast ditch effort me thinks. I was getting the same with 23andme in the last year when all the drama was happening.
- canadianfella 2y ago[dead]
- joshdavham 2y agoI’ve often noticed a strong correlation between bad products and amount of advertising, especially in consumer software. I’m wondering if there’s actually a reason for this.
- bbor 2y agoWell, it’s an inherently manipulative practice, no exceptions. If you sold something people truly wanted, you wouldn’t need a huge ad campaign, and if you did run one, you’d grow past it soon enough. Only a stuck/sinking firm would throw significant money at the problem for multiple quarters to juice their metrics, IMO
- valval 2y agoI’m awake and older than 8 so it would make sense to me that good products need less advertising, but I’d still be only guessing.
- caeril 2y agoOne would think, but it's an industry I'll never understand, either. Coca-Cola doesn't need to advertise. It's delicious, everyone knows it exists, and yet they still spend ungodly amounts of money on advertising. KO shareholders presumably wouldn't let them get away with this if it wasn't justifiable. So there's something I'm likely missing.
- drdaeman 2y agoAnecdote: almost every time I hear some US company isn't doing well, I'm seeing a bunch of coupons on my credit cards for various discounts with that company. Bed Bath & Beyond, 23andMe, etc etc.
- Suppafly 2y agoThis article is the first time I've heard of Chegg of in like 20 years, I had no idea it was still around.
- kijin 2y agoThey should sell their database of correct answers to one of the AI companies. They have college-level, human-verified authoritative answers to common questions. I'm sure somebody is willing to pay for that kind of training data.
- TomatoCo 2y agoMaybe it's worthless because it's all already been scraped?
- Suppafly 2y agoIt's probably paywalled like every time I google one of my kid's homework questions. ChatGPT would be trained to say "please login to see the answer" to all these questions.
- TheNewsIsHere 2y agoThat would be a net win for society!
- jd24 2y agoI can't image it is worth much for training. A lot of student submissions are going to be incorrect bull or only worth partial credit at best.
- OccamsMirror 2y agoThey paid for Reddit content...
- buryat 2y agothe LLM will be as useful as a college graduate then
- kibibu 2y agoYes, but the questions are the private IP of colleges.
- FreakLegion 2y agoChegg was already down 75% from its ZIRP-induced peak before ChatGPT existed. There's hardly even correlation here, never mind causation.
- dehrmann 2y agoIt might not even be ZIRP. It jumped right after March, 2020, so it might have always been a bad covid-related trade.
- FreakLegion 2y agoMarch 2020 is when the Fed cut the federal funds rate to 0-0.25%, i.e. the beginning of COVID-era ZIRP. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... (This after already shaving 0.5% off at the beginning of the month, two weeks earlier.)
- dehrmann 2y agoRight, but did the price go up because money was free or bet on what the world would look like during and post covid?
- FreakLegion 2y agoBoth of course, plus quantitative easing and other factors. There was a lot of new money (QE) and not a lot of places to put it (ZIRP). In that context, companies like Chegg and Zoom were interesting bets and seemed to have more upside than, say, Netflix, which also had a strong couple years. But the whole market more than doubled in that time. The money had to go somewhere.
- n2d4 2y agoTo be fair, 95% down since ChatGPT came to life is also a lot
- black_13 2y ago[dead]
- trentnix 2y agoAn aside, trying to read the Gizmodo story was like Idiocracy come to life. There was an overlay at the top with an ad. There was an overlay at the bottom with an ad. And the story, confined to 60% of the remaining space, had a giant ad inline every paragraph or two. I know online media is a tough business, but I just can’t imagine the reasoning that has led to such an absurdly painful user experience.
- Terr_ 2y agoI can only hope that some future generation regards modern advertising/gambling-traps with the same hostility we have today towards indentured servitude or predatory "company stores".
- accrual 2y agoIt loaded nicely for me, but NoScript blocked 3 of 5 domains and uBlock blocked 1 item. Reader mode further cleaned up and rendered it like a newspaper article.
- darknavi 2y agoAnd how much money did they make from your viewing of the article? Likely 0. If only companies would learn that tasteful ads are possible and would likely give better returns, but the web has been infested with garbage so most people have their guards up.
- stackghost 2y agoIt's a simple risk/reward calculus. The reward of not having to see ads everywhere is absolutely worth the risk that some of these shitty media companies go under. Ads are repulsive. The good companies will find a way to survive.
- hedora 2y agoI've often wondered why the ad blocker can't render the full page to some offscreen buffer to get the ad impression revenue for the site. It could even randomly click an ad or two every few minutes.
- SoftTalker 2y agoThe AI companies will follow. It's all a race to the bottom. Training and running the AI models is expensive and competitive pressure will push profits to near zero.
- GaggiX 2y agoSome AI companies are going to win the competition. I don't think OpenAI is going anywhere.
- changoplatanero 2y agoi guess the main question is will selling access to LLMs be like grocery stores where the margins are tiny or will it end up being like lawyers and doctors where they maintain high margins
- ozgrakkurt 2y agoSmall correction, you probably mean hospital vs grocery store
- karlgkk 2y agoThat’s the funny thing though… historically, companies that have a technical lead but in a margin sensitive business tend to get crushed by anyone who can reduce those margins.
- deleted 2y ago[deleted]
- ijustlovemath 2y agoThey're already highly unprofitable, it's just a matter of how much the big execs of cloud companies (Nadella, Bezos, whoever runs GCP) actually stick to their commitment of "its better to waste money than miss out on the upsides". In that sense, there's surely a ceiling but we wont get to it unless the gains stop coming in from their millions in expenditure on training costs. Or we could all agree its meh and move along from this trend.
- hparadiz 2y agoDon't they still have their base business model with textbook rentals? 99% loss seems like an overreaction?
- dehrmann 2y agoYeah, I'm not buying the narrative yet. https://finance.yahoo.com/quote/CHGG/financials/ https://finance.yahoo.com/quote/CHGG/financials/ Revenue's down 10% from a year ago. Annual revenue is flat-ish since 2020. It's been breaking even for a while now. ChatGPT might be an excuse or a contributor, but the real issue seems to be with management not turning on profit for what should be a mature business with a straightforward business model.
- kibibu 2y agoTheir main business model isn't textbooks though; it's "homework help".
- kelnos 2y agoI feel like the company was wildly overvalued; dropping 99% of its market cap might be a reasonable correction, and accurately reflect the value of the textbook rental business.
- zinekeller 2y agoRehash of the WSJ article which was discussed here: https://news.ycombinator.com/item?id=42098342 https://news.ycombinator.com/item?id=42098342
- teleforce 2y agoPrevious post on HN. ChatGPT Brought Down an Online Education Giant: https://news.ycombinator.com/item?id=42098342 https://news.ycombinator.com/item?id=42098342
- jrm4 2y agoGreat. Good riddance.
- Animats 2y agoHow did they ever get a $15 billion valuation? Net income was $18 million in 2023.
- spencerchubb 2y agoYou gotta look even earlier than 2023. Their net income peaked in 2021 at 776 million for the year, growing 20% year over year. That's a 20x valuation, which is honestly not that crazy considering the bubble of 2021.
- cloudking 2y agoInnovator's Dilemma
- gorogorogorokun 2y agoGood riddance, I hate their pages polluting search results, when there's no answer to the question I searched for except an AI generated stand-in. There's tons of other sites like this too which I hope will die the same way.
- PsylentKnight 2y agoFWIW if you use Kagi you can filter out sites like that
- Xxfireman 2y agoI find the whole textbook market a scam for college students. How are colleges forcing students to buy the newest textbooks on subjects that have been around since the 1700s. There is no need for an intro calculus book printed in the 21st century.
- Arnt 2y agoMine didn't look very good after I'd worked through it. Good shelf life, but 24 years of use? Not a chance.
- rimunroe 2y ago> Mine didn't look very good after I'd worked through it. Counter-anecdote: other than maybe the odd banged corner, mine are pretty much pristine. > Good shelf life, but 24 years of use? Not a chance. Did I miss something in the article? Why would anyone expect them to last for 24 years of continuous usage?
- Arnt 2y agoNo, one comment up. "No need for a calculus textbook printed after y2k" or words like that. I guess that's 23 years of use if you're pedantic enough, not 24. A textbook that's gone through five students will have encountered someone like you and also someone like me.
- calciphus 2y agoGP started with the premise "we don't need one printed in the 21st century". A more generous reading of that argument might be "we don't need one authored in the 21st century", not that textbooks would never need reprinting and last forever through two dozen owners
- rimunroe 2y agoD'oh! Thanks. I had indeed interpreted the person they were replying to as talking about authorship rather than printing …despite them saying “printed”
- Duanemclemore 2y agoThe Cheating Industry was ripe for disruption.