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People Inc forges AI licensing deal with Microsoft as Google traffic drops
People Inc. signed an AI licensing deal with Microsoft to enter its content marketplace, marking its second AI partnership. CEO Neil Vogel noted the deal follows a decline in Google traffic from 54% to 24% over two years, attributing it to Google's AI Overviews. Vogel criticized AI firms for using media without compensation, while Cloudflare's tech helped facilitate this agreement, enhancing publisher leverage in content negotiation.
Key points
- 1. People Inc. signed an AI licensing deal with Microsoft, becoming a launch partner for its publisher content marketplace.
- 2. The CEO emphasized the importance of publishers being compensated for content used in AI, contrasting Microsoft’s deal with an earlier agreement with OpenAI.
- 3. Google's AI Overviews negatively impacted People Inc.'s website traffic, dropping from 54% to 24% over two years.
- 4. People Inc. blocked AI crawlers using Cloudflare's tech, which led to increased negotiations with AI companies for content deals.
- 5. Digital revenue increased by 9% to $269 million in the quarter due to growth in performance marketing and licensing.
Why it matters
- This AI licensing deal reflects a growing trend in the media publishing industry, where publishers seek to secure compensation from AI companies for content usage.
- The decline in Google traffic aligns with broader concerns about AI's impact on traditional media and search engine dynamics.
- The integration of technology like Cloudflare to protect digital assets showcases a proactive approach by publishers to negotiate better terms with AI firms.
The AI licensing agreement with Microsoft highlights a strategic shift for People Inc. in response to diminishing Google traffic while advocating for fair compensation in AI content usage, representing a pivotal moment for publishers navigating the evolving digital landscape.