In a surprising move, media powerhouse People Inc. (formerly Dotdash Meredith) has partnered with Microsoft in a groundbreaking AI licensing deal, marking a shift in the industry. But here's the twist: this comes amid declining Google traffic for the publisher.
The AI Licensing Deal:
People Inc., a leading media publisher, has strategically aligned with Microsoft, as revealed in IAC's Q3 earnings report. This deal grants People Inc. a launch partner status in Microsoft's publisher content marketplace, a significant step after their OpenAI partnership in 2024. CEO Neil Vogel described the marketplace as a pay-per-use platform, ensuring fair compensation for content used by AI players.
The Microsoft Factor:
Microsoft's commitment to paying for content sets them apart. Their AI assistant, Copilot, will be the first buyer in the marketplace, a move that Vogel applauds as a testament to the value of content in creating high-quality AI.
Google's AI Overviews: A Double-Edged Sword:
The deal's announcement was accompanied by a revelation: Google Search's AI Overviews feature has been cannibalizing People Inc.'s traffic. In a stark contrast, Google Search, once contributing 54% of the publisher's traffic, now accounts for just 24%. This shift has likely influenced People Inc.'s strategy, prompting them to explore new avenues for content monetization.
The OpenAI Partnership vs. Microsoft:
Neil Vogel differentiated the Microsoft deal from the OpenAI agreement, which he likened to an 'all-you-can-eat' buffet. People Inc. embraces both models, emphasizing the importance of respect and fair compensation for their content. However, specific deal terms remain undisclosed.
People Inc. Takes a Stand:
The publisher has been vocal about AI companies using media content without compensation. Vogel publicly criticized Google, labeling them a 'bad actor' for their dual-purpose bot that crawls websites for both Google Search and AI features. This bot is essential for publishers' traffic, leaving them with limited options.
Cloudflare's Role in Negotiations:
People Inc. has strategically employed Cloudflare's technology to block AI crawlers, forcing AI companies to negotiate content deals. This tactic has proven successful, with Vogel noting significant progress in deal-making. The approach has brought numerous AI players to the negotiating table, and more deals are anticipated.
Financial Insights:
People Inc.'s digital revenue surged 9% to $269 million in the quarter, with performance marketing and licensing driving growth. The acquisition of the food-centric media publisher and influencer network, Feedfeed, further diversifies their portfolio.
About the Author:
Sarah, a seasoned tech journalist, has been with TechCrunch since 2011. Her expertise spans various industries, including banking, retail, and software. Reach out to her at sarahp@techcrunch.com or via encrypted message on Signal at sarahperez.01.
