The Zero-Click Era Case Study: How Chegg’s Growth Strategy Became a $14 Billion Vulnerability
Author: IMB Editorial Team
IMB Journal – International Marketing Board
Volume 1 | Issue 7
July 2026
Case Study: How Chegg’s Growth Strategy Became a $14 Billion Vulnerability
Like our June case study, this one is not anonymized. Every figure below is drawn from Chegg’s own public statements, court filings, and financial disclosures, reported across business and trade press through 2025 and into 2026.
The Setup
Chegg built a two-decade-old business on a simple mechanic: a student searches Google for help with a homework question, clicks through to a Chegg page with an answer, and either views it for free or subscribes for full access. At its peak, the company was valued at roughly 14 billion dollars, and organic search traffic from exactly the kind of question a student types into Google, how to solve a quadratic equation, how to balance a chemical equation, was the engine underneath nearly all of it.
The company was not unaware that generative AI could be a threat. In the spring of 2023, Chegg partnered with OpenAI to launch an AI study assistant of its own, hoping to get ahead of the shift. The product struggled to gain traction, largely because students with free access to ChatGPT had little reason to pay for a Chegg-branded wrapper around similar underlying capability.
What Went Wrong
The more serious threat arrived from a different direction. As Google’s AI Overviews scaled up through 2024 and into 2025, they began answering the exact category of question that had always sent students to Chegg, directly inside the Google results page, with no click required. Chegg’s own reporting captured the speed of the collapse: non-subscriber traffic, historically driven by that organic search flow, fell from an 8 percent decline in the second quarter of 2024 to a 49 percent decline by January 2025, according to figures the company later cited in its own statements.
Revenue followed traffic down. By the second quarter of 2025, Chegg’s revenue had fallen by more than a third year over year, to roughly 105 million dollars. The company’s stock, which had traded near record highs in 2021, had lost more than 99 percent of its value by early 2026.
The Response
In February 2025, Chegg’s CEO announced a federal antitrust lawsuit against Google, arguing that AI Overviews unfairly retained traffic that had historically flowed to Chegg and calling the arrangement harmful and unsustainable. Google moved to dismiss the case, arguing in a court filing that Chegg was seeking to blame Google for its own business decline rather than compete more effectively. The litigation is ongoing, with Google having filed multiple motions to dismiss as of early 2026.
Alongside the lawsuit, Chegg cut costs aggressively. It laid off 248 employees, 22 percent of its workforce, in May 2025 and closed its US and Canada offices. A second round that October removed 388 more, 45 percent of what remained. By the most recent count, total layoffs since mid-2024 had reached nearly 1,400 employees. The company also engaged Goldman Sachs to review strategic alternatives, including a possible sale, before ultimately deciding to continue as an independent public company, at least for now.
The Lesson
Chegg’s leadership was not asleep at the wheel. The company saw generative AI coming as early as 2023 and moved to build its own AI product in response. What it could not do was build an alternative fast enough to replace a growth engine that depended entirely on a distribution channel it never controlled, once that channel changed how it worked.
The lawsuit against Google may eventually establish an important legal precedent for publishers in a similar position. But it will not restore the traffic Chegg has already lost, and the case itself illustrates a harder truth about strategic dependency: by the time a company is in court arguing that a platform owes it access to customers, the underlying strategic problem, that the company never owned the relationship with those customers in the first place, has usually already been decided.
Part of a three-part series on strategy in the zero-click era. Next: a short insight on the one question that reveals whether a growth strategy is durable or borrowed.