Perplexity will put ads in its AI search engine and share revenue with publishers

When people type a question into Perplexity, the two-year-old search engine scours the internet and uses information from multiple sources, including online publishers, to synthesize an answer using AI. Soon, Perplexity will start sharing revenue with some publishers as part of an advertising platform it plans to launch around the end of September, the company announced on Tuesday.

The initiative, known as the Perplexity Publishers’ Program, comes less than two months after the San Francisco-based startup backed by investors like Jeff Bezos and NVIDIA, and valued at $3 billion, came under fire from Forbes, Wired, and Condé Nast for allegedly scraping content without permission and ignoring robots.txt, a type of file that websites use to block page-crawling bots.

Perplexity’s initial partners include TIME, Fortune, The Texas Tribune, Der Spiegel and Automattic, the company behind WordPress.com. It’s not clear exactly how much revenue Perplexity will share with publishers. Dmitry Shevelenko, the company’s chief business officer, declined to reveal numbers but told Engadget that it would be a “meaningful double-digit percentage shared back with the publishers that contributed source input to the answer." He also said that the partnership would extend across multiple years without specifying how many. What this wasn’t, Shevelenko insisted repeatedly, was a response to the critical press coverage in the last few months. “We’ve been talking to publishers since January,” he claimed. “No aspect of this program is reactive to these recent accusations.”

For months, publishers around the world have been concerned about the potential of AI-powered search engines and chatbots to decimate traffic by simply sucking up their content and using it to provide people with answers directly instead of having to actually visit their websites. Google has followed suit too — the company now sources answers from search results and displays AI-generated versions at the top of the page. But so far, it doesn’t compensate publishers.

“[Our revenue share] is certainly a lot more than Google’s revenue share with publishers, which is zero,” Shevelenko said. “The idea here is that we’re making a long-term commitment. If we’re successful, publishers will also be able to generate this ancillary revenue stream.” Perplexity, he pointed out, was the first AI-powered search engine to include citations to sources when it launched in August 2022, although the company reportedly redesigned its user interface to show them more prominently after being called out by Forbes in June.

AI companies like OpenAI have struck deals with major publishers including TIME, News Corp, Vox, Axel Springer, the Financial Times and others to use their content to train AI models, writing checks ranging from $5 million to $250 million. Perplexity’s revenue-sharing program, however, is different: instead of writing publishers large checks, Perplexity plans to share revenue each time the search engine uses their content in one of its AI-generated answers. The search engine has a “Related” section at the bottom of each answer that currently shows follow-up questions that users can ask the engine. When the program rolls out, Perplexity plans to let brands pay to show specific follow-up questions in this section. Shevelenko told Engadget that the company is also exploring more ad formats such as showing a video unit at the top of the page. “The core idea is that we run ads for brands that are targeted to certain categories of query,” he said.

This makes sense for Perplexity because it does not train its own AI models. Instead, it lets users choose from leading AI models like OpenAI’s GPT-4o, Anthropic’s Claude 3.5 Sonnet and Meta’s Llama 3.1 to summarize answers from the web. “It’s very simple,” Shelevenko said, “if we’re making money and a publisher’s content was used on that ad impression, the publisher will get a cut of that revenue.”

But without knowing how much percentage of ad revenue Perplexity plans to split with publishers, it’s unclear whether the move will help publishers make up for any revenue lost due to declining traffic as AI-generated search engines and chatbots become more popular. And breaking into an online advertising business dominated by Google and Meta isn’t easy. “Setting up an ads business takes time,” Toshit Panigrahi, founder of Tollbit, a startup that lets publishers monetize content by offering it to AI companies for a fee they can set themselves, told Engadget. “Publishers are expected to hand over content today in the hopes that Perplexity sets up a successful ads business and cuts them in.”

Shevelenko refused to comment on the recent controversies that Perplexity has been involved in with publishers but acknowledged that onboarding them had become harder in the last few months. “Some [of our conversations] were in a great place,” he said, “and then the bad press hit and then they kind of, you know raised more questions.”