People Inc forges AI licensing deal with Microsoft as Google traffic drops

People Inc., a leading media publisher in the United States, has announced a significant AI licensing partnership with Microsoft. This collaboration was unveiled on Tuesday during the parent company IAC's third-quarter earnings report. As part of this deal, People Inc. will be a launch partner for Microsoft's new publisher content marketplace, marking the company's second venture into AI agreements following its prior partnership with OpenAI last year. CEO Neil Vogel emphasized the innovative nature of the marketplace, describing it as a pay-per-use system where AI platforms can directly compensate publishers for utilizing their content on an 'a la carte' basis. He commended Microsoft's commitment to ensuring fair payment for content to bolster its AI initiatives, revealing that Microsoft’s Copilot would serve as the initial buyer in this new marketplace. "Being in collaboration with them is a strong validation of our efforts and highlights the significant value of quality content in AI development," Vogel stated. The announcement of the Microsoft partnership coincided with troubling news for People Inc. regarding its traffic from Google Search. For the first time, the company disclosed to investors that Google, which previously accounted for 54% of its traffic two years ago, has seen its share plummet to just 24% in the last quarter. Vogel indicated that the current deal structure differs from the OpenAI agreement, which he referred to as an 'all-you-can-eat' model. However, he expressed satisfaction with either approach, emphasizing the importance of having their work acknowledged and compensated. People Inc. has raised concerns about how AI companies have leveraged media content without proper payment to enhance their AI systems. Recently, Vogel criticized Google, labeling it a 'bad actor' for utilizing the same bot to crawl websites for both its search engine and AI features, leaving publishers unable to block this bot despite its significant role in driving traffic. To combat this issue, People Inc. has employed technology from Cloudflare to restrict access to other AI crawlers, which has prompted various AI entities to approach the company for content agreements. In September, Vogel noted that utilizing Cloudflare's technology had encouraged AI companies to negotiate, stating that the advancement in deal progress was 'much further along' since adopting this strategy. During the earnings call, he reiterated that blocking AI crawlers has proven 'very effective' in fostering negotiations. Looking ahead, Vogel hinted at the possibility of additional deals being announced soon. IAC’s earnings report revealed that People Inc. achieved a 9% increase in digital revenue, totaling $269 million for the quarter, driven primarily by performance marketing and licensing, which grew by 38% and 24%, respectively. The report also mentioned the acquisition of a food-centric media publisher and influencer network, Feedfeed.