People Inc. is making “Who needs Google?” an entire business philosophy.
The company – still technically IAC, though it’s rebranding to People Inc. – is undergoing a major reorganization. It has spent the past few years revamping its structure to be less dependent on search and social platforms, senior executive and chairman Barry Diller told investors during the company’s Q1 earnings call on Tuesday.
The strategy makes sense considering that, as of Q1, People Inc. has lost about two-thirds of its Google referral traffic, Diller said.
“I’ve said for a decade and more that we all are serfs on the property of the monopoly of Google,” he said. “We have now transitioned into true positive territory of our own traffic, with our own hands, not dependent on anyone else.”
Organic growth aside, People Inc.’s restructuring has also included efforts to grow off-platform audiences through syndication deals with news aggregators like Apple News+ and generative AI licensing agreements with OpenAI and Microsoft.
As a result of those efforts, People Inc. reported 27% year-over-year growth in its off-platform audiences in Q1.
And this off-platform growth was a significant contributor to an 8% growth in digital revenue for People Inc.’s publishing portfolio – formerly known as Dotdash Meredith. That unit has now reported 10 consecutive quarters of growth.
In Google’s shadow
Altogether, People Inc.’s publishing arm reported $253 million in digital revenues for Q1. Its 8% growth rate included a 1% uptick in advertising and a 15% increase in performance marketing revenue, with the latter boosted by a 22% increase in affiliate commerce.
People Inc.’s publishing portfolio also saw 26% growth in licensing and other revenue, which the company attributed mainly to its D/Cipher+ contextual targeting platform, improved monetization on Apple News+ and a content partnership with Meta from the end of last year.
But People Inc.’s programmatic ad revenue was down for the quarter, due to a 17% YOY decrease in reader sessions.
Still, while People Inc. has done a solid job of growing revenues despite its drop in Google traffic, Google remained a recurring villain throughout its earnings call. So People Inc. isn’t exactly out from under Google’s shadow just yet.
Google’s casting as a central villain had Diller in a particularly spicy mood on the call. He lightly scolded People Inc. CEO Neil Vogel for talking too loudly and too fast, and criticized an investor question for focusing too much on the minutiae of the company’s Q1 earnings rather than its overall transformation. But Diller saved his heaviest punches for Google.
For example, Diller pointed to Google’s refusal to renew People Inc.’s search contract under its existing terms as the reason why People Inc. decided to shut down its Ask.com search business earlier this week. (Jeeves, we hardly knew ye.)
Meanwhile, Vogel singled out Google as the one generative AI search provider that People Inc. has not meaningfully engaged with regarding a licensing deal.
And both Diller and Vogel were bullish about a possible windfall from damages in the company’s antitrust lawsuit against Google, which stems from the US government ruling last year that Google has operated illegal monopolies in the search and publisher ad tech markets.
People Inc. anticipates spending up to $15 million on litigation related to the Google suit this year, and for the case to be resolved by next year.
Publishing in the AI era
In addition to taking potshots at Google, People Inc. also previewed plans to downsize by focusing mainly on its key publishing properties.
Among the roughly 40 titles in People Inc.’s publisher portfolio, about nine or 10 are “significant brands,” Vogel said. The company’s plan is to parlay those top-tier brands into more licensing and ecommerce opportunities.
For instance, the magazine Southern Living is launching its own sweet tea, Vogel said. Southern Living also sells architectural plans for designing and building the types of Southern-style houses featured in its content, he said.
Continuing on the ecommerce front, Vogel added that People Inc. will launch a new social shopping tool where users can plan future purchases, although he didn’t offer details.
All of these new ventures reflect a pivot on People Inc.’s part to emphasize branded products and services instead of traditional content.
Instead of a publishing model where People’s content is exploited by the likes of Google, Meta and LLMs, “we’re going to exploit it,” Diller said.
“I would be giantly disappointed if we are not able to build real, substantial businesses, having nothing to do with advertising [or] subscriptions, but having to do with goods, services, products,” he added.
Diller’s goal to be less dependent on ad revenue notwithstanding, People will also continue to prioritize its D/Cipher+ ad targeting tech.
For example, People Inc. recently placed its legacy print media agency M&I under the management of the D/Cipher team and transitioned its focus to digital media. This move opened up a new distribution channel for D/Cipher to work with independent agencies and political advertisers that previously were not served by People’s sales teams, said the company’s new CFO, Tim Quinn, who was named to the role last week.
But, while People Inc. has sought to grow by addition over the past decade, it is now deprioritizing mergers and acquisitions, Diller said, and plans to shrink its M&A team.
Looking forward, People Inc. is thinking strategically about how to drive traffic while also getting the most out of its AI content licensing deals. This includes a fundamental shift away from evergreen content that is easily replicable by AI search tools to producing more new content that can bring traffic to sites before AI gets a chance to scrape it, said outgoing COO and CFO Christopher Halpin.
Vogel affirmed that strategy as a viable approach for publishers trying to survive in the AI era.
“We’re entering a phase of AI where the available sources of information have been crawled, and what’s really valuable is people who are making new information,” he said.
But looking longer term, not even Diller could predict where People Inc. will end up a few years from now.
“I can tell you what the next year, maybe, or months are going to be,” he said in response to an investor question. “Five years? Who the hell knows?”
