One of the largest media publishers in the United States, People Inc. (formerly Dotdash Meredith), announced on Tuesday that it has signed a groundbreaking artificial intelligence content licensing agreement with Microsoft. This news was revealed by its parent company, IAC, during the release of its third-quarter financial report.

According to the agreement, People Inc. will become one of the first partners in the Microsoft Publisher Content Marketplace. This is the company's second major AI collaboration following a deal with OpenAI last year.

Robot AI

Pay-as-you-go Market: Microsoft Copilot as the First Buyer

Neil Vogel, CEO of People Inc., described this new market in partnership with Microsoft as "essentially a pay-per-use market," where artificial intelligence companies can "order content like a menu," directly paying publishers for using their content.

Vogel highly praised Microsoft's commitment to purchasing content to support its AI work and revealed that Microsoft's Copilot will be the first buyer in this market. He emphasized, "Being on the same stage with them is a great recognition, and also a significant acknowledgment of the publishing market and the value of content, which is crucial for building high-value artificial intelligence."

Loss of Traffic and Defense of Content Value

This cooperation agreement was announced alongside IAC's financial report, which also revealed that Google's AI overview feature in search is harming People Inc.'s traffic. The data disclosed for the first time to investors showed that Google's share of total traffic has dropped sharply from 54% two years ago to 24% in the last quarter.

Despite the impact from Google, People Inc. expressed satisfaction with both the "unlimited supply" model with OpenAI and the "pay-per-use" model with Microsoft, as what matters most to the company is that its work is "given respect and compensation". However, specific transaction terms were not disclosed.

Acting Now: Using Technology to Bring AI Companies Back to the Negotiation Table

People Inc. has long questioned AI companies' practices of accessing media resources without payment for product training. Vogel previously criticized Google as a "bad actor" for using the same robot program to scrape websites for search engines and AI features, without publishers being able to block it.

However, People Inc. is now using Cloudflare's technology to block other AI crawlers. Vogel confirmed that this action is "very effective" and "has almost brought everyone to the negotiation table", prompting AI companies to actively seek partnerships. He pointed out that after adopting this solution, progress in cooperation has "significantly accelerated," and he hinted that more deals will be announced in the future.

Financial Highlights: Digital Revenue Grows Against the Trend

In terms of business, IAC reported that People Inc.'s digital revenue grew by 9% to $269 million this quarter, mainly driven by strong growth in performance marketing and licensing businesses, which increased by 38% and 24%, respectively. Additionally, People Inc. announced the acquisition of a media publisher and influencer network focused on food, Feedfeed.