alt Hacker NewsChegg’s decline is a concrete example of how AI search is changing the web
There’s been a lot of debate about whether Google’s AI Overviews and tools like ChatGPT are actually harming publishers. One publicly traded company’s timeline is worth looking at: Chegg.
What happened (with sources):
2021: Chegg launched Uversity, a platform for educators to share academic content. (Wikipedia)
2023: ChatGPT emerged as a serious competitor in homework help. Chegg responded by launching CheggMate, its own AI product built on OpenAI’s models. (Wikipedia)
Late 2024: Chegg reported accelerating subscriber declines, widely attributed to users shifting to free AI tools instead of paid study platforms. (WSJ, company filings)
Feb 2025: Chegg sued Google, alleging that AI Overviews reduced traffic to Chegg by answering questions directly in search results, harming acquisition and revenue. (Search Engine Land, Reuters)
May 2025: Chegg laid off ~22% of its workforce (≈248 employees), citing competitive pressure from AI and changes in search behavior. (Reuters)
Oct 2025: Chegg announced another round of layoffs (~45%, ≈388 employees), explicitly referencing “the new realities of AI” and reduced traffic from Google to content publishers. (Reuters / SF Chronicle)
What the data suggests (more broadly):
Independent studies show that when Google AI Overviews appear, users are significantly less likely to click through to external sites.
“Zero-click” searches (where users get answers directly on the results page) have increased, especially for informational and educational queries.
The impact isn’t uniform — some publishers report minimal effects — but content that answers how-to, homework, or factual queries appears most exposed.
Why this matters:
Chegg isn’t a small blog or SEO-driven site. It’s a public company with audited financials, legal disclosures, and incentives not to exaggerate under scrutiny. Its filings and lawsuit don’t claim AI is “bad” — they claim that traffic flows are structurally changing.
This doesn’t prove AI search is “killing the web,” but it does show:
AI answers are substituting clicks, not just competing for them.
Entire business models built on informational content are under pressure.
“Build better content” may not be sufficient when answers are synthesized upstream.
Curious how others here see it:
Is this a temporary transition problem?
Or are we watching the unbundling of the open web’s traffic economy in real time?
The educational and informational queries were always the least valuable from a monetization standpoint. Chegg Answers could rank for these low competition (also low commercial intent) terms-- think queries like phrases from textbooks students would be querying. There is virtually 0 way (for people besides Chegg) to monetize these types of queries. Now Google can answer these queries directly, albeit with the assumption it costs them slightly more to serve these AI responses than a search query.
AI overviews are breaking the implicit "contract" for informational sites-- "we will create content to rank on Google with the expectation of monetization via display ads, mailing list growth and/or sales commissions of some sort." If these sites now lose 90% of their traffic, they simply go extinct. We have already seen the destruction of the old web era sites and the walled gardens being built. How many new sites, at the same frequency as 15 years ago, 1) get built and 2) get visibility without relying on one of the fickle walled gardens for an audience?
Google will probably figure out a way to monetize these informational queries by building better profiles of users. Or most likely, they start slipping in commercially biased responses-- either natively or disclosed, but probably based on all user conversations instead of the current one.