Perplexity AI, a well-funded AI search engine startup, has introduced an ad revenue-sharing program to benefit publishers. The announcement comes as Perplexity, based in San Francisco and backed by over $165 million in funding, seeks to foster a more equitable relationship with content creators whose articles enhance its search results.
Perplexity’s AI search engine stands out by generating direct answers in natural language instead of presenting a traditional list of web pages. This functionality extends to tasks such as solving math problems, making it a versatile tool for users. The company currently offers a paid version of its search engine that provides more detailed responses than the free edition, contributing to its revenue stream.
Compensation for Publishers
Under the new revenue-sharing program, publishers will receive compensation when their articles are used to generate prompt responses that lead to ad revenue. The company will pay a flat fee for each instance where a news article contributes to a search result that generates advertising revenue. According to CNBC, publishers will receive a double-digit percentage of the ad revenue per cited article. If multiple articles from the same publisher are referenced in a single query, each will be compensated individually.
Participating publishers will also benefit from a free one-year subscription to the paid version of Perplexity’s search engine. Additionally, they will gain access to the company’s application programming interfaces (APIs) and technical support, enabling them to embed the search engine into their websites.
Addressing Controversy
The launch of the revenue-sharing program comes shortly after Perplexity faced allegations of plagiarism from Forbes, which claimed that Perplexity’s search engine reproduced content from one of its paywalled articles. Additionally, Wired reported concerns over Perplexity’s web scraping practices, noting that the startup’s crawlers appeared to bypass websites’ blocking attempts.
Future Prospects
Perplexity aims to enroll 30 publishers into the revenue-sharing program by the end of the year. Early adopters include prominent names such as Der Spiegel, Entrepreneur, Fortune, The Texas Tribune, TIME, and Automattic Inc., the developer of WordPress. Automattic’s hosting service, WordPress.com, supports many websites containing valuable content for Perplexity’s search engine.
Introducing this revenue-sharing program coincides with rumors of Perplexity seeking to raise more than $250 million at a valuation of up to $3 billion. With the company’s annualized recurring revenue reportedly at $20 million, the anticipated boost from search ads could enhance its financial standing and appeal to investors.
Perplexity’s ad revenue sharing program represents a significant step towards creating a fairer digital ecosystem for publishers, addressing recent controversies, and potentially enhancing the company’s market valuation. This initiative compensates publishers and strengthens Perplexity’s search engine by integrating high-quality content from reputable sources.
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