In a significant move, People Inc., one of America’s leading media publishers, has inked a licensing agreement with Microsoft focused on artificial intelligence. This announcement came out on Tuesday during the third-quarter earnings report of their parent company, IAC.
Under this partnership, People Inc. will serve as a launch partner in Microsoft’s new marketplace for publisher content. This marks the company’s second collaboration in the AI realm, following their previous partnership with OpenAI last year.
Neil Vogel, the CEO of People Inc., described the new marketplace as essentially a system where AI companies can pay publishers for the use of their content on a per-use basis — think of it as an “a la carte” menu.
He expressed appreciation for Microsoft’s commitment to compensating content creators, noting that Microsoft’s Copilot would be the first client to purchase from this marketplace.
Vogel mentioned, “It’s a strong endorsement for us to collaborate with them, showcasing the importance of the publishing marketplace and the value of quality content in creating high-value AI.”
During IAC’s earnings report, the news of the Microsoft deal was accompanied by concerns regarding a decline in traffic stemming from Google Search’s AI Overviews. For the first time, People Inc. revealed to investors that their reliance on Google Search has drastically dropped; it used to account for 54% of their traffic two years ago, but now it’s down to just 24%.
Vogel pointed out that this new agreement is different from their collaboration with OpenAI, which he described as more of an “all-you-can-eat” model, but stressed that the company values respect and payment for their work, no matter the arrangement. However, details on the specific terms of the deal were not disclosed.
People Inc. has been vocal about concerns over how AI companies often scrape media content without remuneration to train their technologies. Recently, Vogel took aim at Google for utilizing the same bot to scan the web for its search engine and its AI features, labeling the tech giant a “bad actor.” Publishers are stuck as they cannot block this bot, given that Google Search remains a substantial source of their traffic.
To tackle this issue, People Inc. employs technology from Cloudflare, enabling them to block other AI crawlers. This strategy has reportedly prompted many AI companies to reach out for content deals. Back in September, Vogel mentioned that leveraging Cloudflare’s tools helped bring AI players to the negotiating table more efficiently.
He reaffirmed such sentiments during today’s earnings call, stating that blocking AI crawlers has proven “very effective” and has attracted nearly all relevant parties to discussions. Vogel hinted at the likelihood of even more deals forthcoming.
For the quarter, IAC indicated that People Inc.’s digital revenue saw a 9% boost, reaching $269 million, largely fueled by strong performance marketing and licencing, which grew by 38% and 24%, respectively. Additionally, IAC highlighted its acquisition of Feedfeed, a food-centric media publisher and influencer network.
