Longtime Silicon Valley exec Dan Rosensweig (pictured here) is stepping down as CEO and president of the Guitar Hero division of Activision Blizzard (ATVI) to take a new job as CEO of Chegg, the top online textbook rental startup.
Both companies confirmed the move, which is somewhat unexpected, given the former Yahoo (YHOO) COO landed the job running the top gaming franchise in March of last year.
It has been an eventful, but also a particularly tough year at Guitar Hero, in the face of yet another withering downturn in the gaming market.
While Activision introduced a new version of its flagship Guitar Hero game, as well as a new DJ Hero, Band Hero and a Guitar Hero: Van Halen version, sales were weaker overall, even though DJ Hero was the the No. 1 new game in both the U.S. and Europe.
Nonetheless, according to a recent report of the research firm NPD Group, sales in the videogame space were down eight percent in 2009 from 2008.
And while Guitar Hero gained market share as the most popular such game in its genre, Guitar Hero 5 sold slightly less than 996,000 units from September through December, according to NPD. Guitar Hero: World Tour, in comparison, sold 3.4 million units the year earlier.
In contrast, Rosensweig will be take over a much faster-growing business at Chegg, which is based in Santa Clara, Calif. and has become the dominant front-runner in the increasingly competitive online textbook rental space.
To help it maintain that lead, Chegg has garnered a huge $144 million investment kitty.
Top venture firms, such as Kleiner Perkins, Foundation Capital and, most recently, Insight Venture Partners, have presumably handed over that money to Co-founders Osman Rashid and Aayush Phumbhra in the hopes of big returns.
The pair first started Chegg in 2005 at Iowa State University as a classified rental service, where books were the dominant item, but evolved its business to focus on actually doing the textbook rentals.
Its unusual name, Chegg, is a mashup of chicken and egg and its model is similar to that of innovative video rental outfit, Netflix (NFLX).
Chegg now serves close to 7,000 schools across the U.S. and has a cute practice of planting a tree for every textbook rented, bought or sold.
With 120 employees in Silicon Valley, as well as more at a warehouse operation in Louisville, Kentucky, Chegg claims it has grown over 600 percent year over year since its founding, although the startup would not provide more specifics on financials.
A spokeswoman said that company rented more books in January of this year than all of last year and has saved students more than $137 million.
Typically, a rental costs a fraction of what buying a book outright does.
All this activity has attracted a lot of interest from both big and small players, especially given the $10 billion college textbook business.
The Barnes & Noble (BKS) College division recently began testing a textbook rental program and is rolling it out to 25 U.S. colleges. And BookRenter is a smaller competitor.
But with Chegg, Rosensweig is getting to ride the lead horse in the space, taking over for its current CEO and Co-founder Rashid.
In an interview a year ago, in fact, Rashid said: “I do not want to be a long-term CEO. My passion is solving the problem and getting the company to a place where it can be taken to the next step.”
While he will remain chairman, the entrepreneur has also recently closed a $7.5 million funding for a new stealth startup called Kakai. Sources have said it is focused on the even more crowded e-reader space.
The replacement for Rosensweig–who has been working in private equity since his departure from Yahoo (YHOO) in late 2006, has also worked at CNET Networks and Ziff-Davis–will be the Guitar Hero division’s current COO.
And, until he has something to say about Chegg, here is a video interview I did with Rosensweig in September, when the new version of GH5, as well as Band Hero and DJ Hero, were launching:
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