Chegg demands Google for hurting traffic, since he considers alternatives

CEGG Monday filed a lawsuit at the Federal District Court against Googleclaiming that the artificial intelligence summaries of the search results have harmed the traffic and income of the online education company.

The legal movement occurs almost two years after former CEO Dan Rosensweig said that students who get involved with OpenAi’s Chatgpt assistant were cutting the Chegg’s New client growth.

Chegg is worth less than $ 200 million, and in the negotiation outside the schedule on Monday, the action quoted just above $ 1 per share. Chegg has committed Goldman Sachs and will analyze strategic options, including being acquired and running privately, told the president Nathan Schultz to analysts in a Monday gain call.

ChegG reported a net loss of $ 6.1 million at $ 143.5 million in revenues of the fourth quarter, a 24% decrease year after year, according to a statement. Analysts surveyed by LSE expected $ 142.1 million in revenues. The Management requested income from the first quarter between $ 114 million and $ 116 million, but analysts had aim at $ 138.1 million. The action fell 18% in the extended trade.

Google forces companies such as “to” supply our patented content to be included in Google’s search function, “said Schultz, adding that the search company uses its monopoly power,” reaping the financial benefits of the Chegg content without have to spend a penny. “

Despite the suit, Chegg has his own AI strategy. It has been drawn Goal Open source flame, as well as anthropic and private mystral models, Schultz said. Chegg has also associated with OpenAi, that the educational company considers as a competitor, along with Google. The company reported that 3.6 million students had subscriptions in the fourth quarter, 21%less. Subscriptions include access to learning assistance with AI. Chegg also rent and sell textbooks.

The descriptions of AI, as the artificial intelligence summaries of Google are called, are available in the company’s search engine in more than 100 countries, with more than one billion users, said the company in October. The links prior to other pages appear in the search results.

With its collection of 135 million questions and answers about a variety of topics, Chegg “depends on the references of the Google monopoly search engine for a large part of the income dedicated to producing original line content,” said the company In the presentation.

Chegg cited a federal judge decision last August that Google It has a monopoly in the search market. The decision occurred after the Department of Justice in 2020 presented its Reference caseclaiming that Google controlled the general search market creating strong entry barriers and a feedback cycle that suffered its domain.

Google did not immediately respond to a request for comments.

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