IAC NASDAQ: IAC is continuing its transformation from a holding company into People Incorporated, with executives describing the shift as a continuation of a strategy outlined earlier this year that includes asset sales, cost reductions and a sharper focus on People Inc. and MGM Resorts International.
Speaking at a J.P. Morgan investor event, Chris said IAC’s consolidation of its corporate operations into People Inc. reflects the company’s narrowed operating structure after the spin of Angi, the sale of Care and the wind-down of its search business.
“When you're down to one core operating business, a key step in this was selling Care and closing that in March, as well as winding down our search business and other things that simplified the drains on corporate,” Chris said. “It made no sense to have two levels of corporate for one operating business, plus our MGM stake, plus some smaller stakes.”
People Inc. Becomes the Core Operating Business
Tim Quinn, CFO of People Incorporated, said People Inc. is “America’s largest publisher by pretty much any measure,” built from the combination of Dotdash, Time Inc. and Meredith. The company owns brands including People, Better Homes & Gardens, Food & Wine, Travel + Leisure, Southern Living and Allrecipes.
Quinn said 70% of People Inc.’s revenue is now digital media, while 90% of profitability comes from digital media. The magazine business remains, but he described it as a smaller portion of the overall company as brands now operate across websites, print, social platforms and Apple News.
People Inc. has continued to grow despite traffic headwinds from AI Overviews, Quinn said. He said the company began preparing for reduced reliance on Google traffic under an internal phrase called “Google Zero,” which asked where its brands would live if no traffic came from Google.
“For the last 10 years, it's been a digital dotcom business, and we think the next 10 years are gonna be all about the brands,” Quinn said.
Non-Session Revenue Drives Growth
Quinn highlighted growth in “non-session-based” revenue, meaning revenue not tied to visits to People Inc.’s owned and operated websites. He said 41% of revenue is now non-session-based and that segment grew 24% in the first quarter. The remaining 60% of revenue, tied to website visits, was flat, producing 8% overall revenue growth in the quarter.
Key components of non-session revenue include:
- Content distribution and syndication through platforms such as Apple News;
- Advertising extensions across social and other off-platform channels;
- D/Cipher, the company’s proprietary ad targeting capability;
- Events, sponsorships and other advertiser solutions;
- AI licensing agreements.
Quinn said D/Cipher uses People Inc.’s first-party data and AI tools to extend advertising performance beyond the company’s owned sites. He said the off-platform application, called D/Cipher Plus, remains early but is expected to add 2 to 3 percentage points to growth in the back half of the year.
AI Licensing Seen as Opportunity
Quinn said People Inc. has signed an “all you can eat” style licensing deal with OpenAI that allows the AI company to train on, display and use People Inc. content. He said People Inc. began blocking AI crawlers from companies without agreements about a year ago, using Cloudflare and other content delivery networks.
That move changed the negotiating dynamic, Quinn said, as real-time access to content became more important for AI companies and applications built on top of AI models.
Quinn said a second model is emerging around pay-per-use licensing, citing Microsoft’s announcement with People Inc. and other publishers late last year. He said current discussions are increasingly focused on pricing rather than whether companies will pay for content.
“We think that the AI, at this point, from this point forward, is more of an opportunity than a threat for our business,” Quinn said.
Capital Allocation Narrows to Stock, MGM and People M&A
Chris said IAC’s capital allocation strategy is now clearer and focused on three priorities: buying back IAC stock, increasing exposure to MGM shares and pursuing strategic acquisitions through People Inc.
He said IAC has repurchased 13% of the company over the past 15 months for more than $400 million. He also said IAC bought about 1 million MGM shares in each of the last two quarters and now owns 26% of MGM.
On MGM, Chris said IAC remains a believer in the company and sees public markets undervaluing the asset. He cited potential value drivers including Las Vegas trends, BetMGM’s move from cash flow losses to cash flow generation, MGM’s international digital assets, MGM China and the company’s Japan project.
Asked what could lead IAC to divest MGM, Chris said that decision would be up to Chairman Barry Diller and the board. He noted that Diller has called MGM a “forever asset,” while also saying nothing has been part of IAC forever except “maybe The Daily Beast.”
People Inc. Eyes Direct Consumer Relationships
Quinn said People Inc.’s acquisition interests are focused on assets that help create direct relationships with consumers. He said the company would consider “A-plus brands,” direct connections to consumers or advertisers, and possibly some ad tech, though nothing is imminent.
Quinn also discussed the company’s “inversion” strategy, which he described as an effort to build durable business models around People Inc.’s brands rather than relying solely on traffic or licensing. One example is MyRecipes, a digital cookbook product that has signed up more than 3 million registered customers in its first year.
“How do we create new, sustainable, durable business models that are not disintermediatable by Google or AI or anyone else?” Quinn said. “That's what we're working on now.”
Quinn said People Inc. has grown for 10 straight quarters, expanded margins and outperformed competitors, and he said he is focused on moving the investor narrative beyond concerns about AI traffic headwinds.
About IAC NASDAQ: IAC
IAC NASDAQ: IAC is a publicly traded holding company headquartered in New York City that builds and invests in consumer-focused internet businesses. Through its portfolio of digital media brands, online marketplaces and subscription services, IAC delivers content and connections across a range of verticals, including lifestyle, finance, home services and personal care. The company's operations span North America and parts of Europe, where its brands reach millions of visitors each month.
In the digital publishing space, IAC's Dotdash Meredith division develops original content and data‐driven journalism across more than a dozen specialty sites.
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