People Inc., one of the United States’ largest media publishers, has officially entered into an AI licensing agreement with Microsoft. The announcement, disclosed Tuesday during parent company IAC’s third-quarter earnings call, marks a strategic pivot as the publisher navigates a significant decline in organic search traffic from Google.
A New Model for Content Licensing
Under the terms of the agreement, People Inc. will serve as a launch partner for Microsoft’s publisher content marketplace. This move follows the company’s previous licensing deal with OpenAI secured last year.
People Inc. CEO Neil Vogel characterized the Microsoft marketplace as an “a la carte” system, functioning essentially as a pay-per-use environment where AI entities compensate publishers directly for content usage. Microsoft’s Copilot is set to be the first buyer within this ecosystem, a development Vogel describes as a significant endorsement of the value of high-quality journalism in training AI models.
Google Search Traffic in Sharp Decline
The partnership announcement arrived alongside sobering data regarding the publisher’s reliance on Google. For the first time, People Inc. confirmed that Google Search traffic has cratered, dropping from 54% of its total traffic two years ago to just 24% during the most recent quarter. The company attributed this downturn directly to the impact of Google’s AI Overviews.
Vogel has been a vocal critic of Google’s practices, previously labeling the tech giant a “bad actor” for using a unified bot to crawl websites for both standard search indexing and AI training. Because publishers cannot block these bots without risking their remaining search visibility, the company has sought alternative leverage.
Leveraging Technology to Force Negotiations
To combat unauthorized data scraping, People Inc. has utilized tools from infrastructure provider Cloudflare to block AI crawlers. Vogel noted that this strategy has been highly effective in forcing AI companies to the negotiating table. “It has brought almost everyone to the table,” Vogel told investors, signaling that further licensing deals are likely on the horizon.
Financial Performance and Growth
Despite the volatility in search traffic, IAC reported robust growth for People Inc. The publisher saw digital revenue climb 9% to $269 million this quarter. This growth was largely propelled by a 38% increase in performance marketing and a 24% rise in licensing revenue. Additionally, the company confirmed its recent acquisition of Feedfeed, a food-focused media publisher and influencer network, as part of its ongoing expansion strategy.