People Inc., a leading media publisher in the United States, has entered into an AI licensing agreement with Microsoft. The announcement was made on March 12, 2024, during IAC’s third-quarter earnings report. This strategic partnership positions People Inc. as a launch partner in Microsoft’s new publisher content marketplace, enhancing its presence in the evolving AI landscape.
Neil Vogel, CEO of People Inc., described the marketplace as a “pay-per-use” model where AI companies can compensate publishers for utilizing their content. This arrangement marks the second AI deal for People Inc. following its collaboration with OpenAI last year. Vogel expressed his appreciation for Microsoft’s commitment to fairly compensating publishers, noting that Microsoft’s Copilot would be the initial buyer in this marketplace.
“It’s a very strong endorsement of us to be in the room with them and a very strong endorsement of the publishing marketplace and the value of content to make AI that is of high value,” Vogel stated.
The announcement of this agreement coincided with a report on declining traffic from Google Search. For the first time, People Inc. shared data revealing that Google, which accounted for 54% of its traffic two years ago, now represents only 24% of its traffic in the past quarter. This drop reflects broader trends affecting publishers as they navigate changes in search engine algorithms and AI integration.
The structure of the deal with Microsoft differs from the previous agreement with OpenAI, which Vogel characterized as an “all-you-can-eat” model. Nevertheless, he emphasized that People Inc. is content with either approach, highlighting the importance of ensuring that their content is “respected and paid for.” Specific terms of the Microsoft deal were not disclosed.
In recent months, People Inc. has expressed concerns regarding how AI companies have utilized media content without adequate compensation. Vogel criticized Google, labeling it a “bad actor” for employing the same bot to crawl websites for both its search engine and AI applications. Publishers find themselves in a challenging position, as they cannot block the bot without risking a further decline in traffic.
To address this issue, People Inc. has implemented technology from Cloudflare to block other AI crawlers. This tactic has prompted AI companies to approach People Inc. for content agreements. In September, Vogel noted that leveraging Cloudflare’s technology had significantly advanced negotiations with AI players, stating that blocking unwanted crawlers has been “very effective” and has “brought almost everyone to the table.”
Looking ahead, Vogel suggested that more deals are likely to be announced in the near future. He reiterated this sentiment during the earnings call with investors, indicating that the company is poised for continued growth in the AI sector.
IAC also reported that People Inc. achieved a 9% increase in digital revenue, totaling $269 million for the quarter. This growth was driven by performance marketing and licensing, which experienced increases of 38% and 24%, respectively. Additionally, IAC highlighted its recent acquisition of Feedfeed, a food-focused media publisher and influencer network, which further diversifies its portfolio.
As the media landscape continues to evolve, People Inc.’s partnerships and strategic initiatives reflect its commitment to adapting and thriving in a competitive environment. The agreement with Microsoft not only signifies a significant move for the company but also underscores the ongoing dialogue between publishers and technology firms regarding fair compensation for content.
