Perplexity Launches Ad Revenue Sharing with Publishers

AI search startup Perplexity has just announced an ad revenue sharing program with publishers amid plagiarism accusations. The AI search startup aims to compensate content creators and build long-term partnerships, but faces challenges in an increasingly competitive and costly landscape.

Key Takeaways:

• Perplexity’s new “Publishers’ Program” will share a double-digit percentage of ad revenue with participating publishers when their content is featured in search results.
• The program follows plagiarism accusations from Forbes and Wired, who found their paywalled content being used without permission in Perplexity’s AI-generated articles and podcasts.
• Despite the controversy, Perplexity believes its use of content falls within the bounds of fair use and copyright law.

Partnering with Publishers: Perplexity has recruited its first batch of partners, including major names like Time, Der Spiegel, and Fortune, offering them favorable terms and additional benefits:

• Partners will receive a free one-year subscription to Perplexity’s Enterprise Pro tier and access to developer tools.
• Scalepost.ai, a new AI startup, will provide insights on how frequently a publisher’s articles appear in search queries.
• Perplexity will provide cash advances on revenue to publishers as it builds its long-term advertising model.

Covering Costs and Competition: AI-powered search is more expensive than traditional search, putting pressure on Perplexity to generate revenue and cover compute costs:

• In May, Perplexity raised $250 million at a $3 billion valuation, but paying publishers adds to the startup’s expenses.
• OpenAI recently announced its own AI-powered search product, SearchGPT, alongside publishing partners like News Corp and Vox Media.
• OpenAI has taken a different approach, allowing publishers to manage how they appear in search features and opt out of having their content used for model training.

Broader Implications: The rise of AI-powered search has forced media companies to grapple with the use of their content and the potential impact on their business models:

• Publishers face a choice between accepting compensation from AI companies or engaging in costly legal battles to protect their intellectual property.
• The CEO of The Atlantic, which recently partnered with OpenAI, acknowledged that AI companies will likely use publishers’ content regardless of their agreement.
• As the AI search landscape evolves, media companies must navigate the challenges and opportunities presented by these new technologies while ensuring the sustainability of their operations and the integrity of their content.