Full Breakdown
Microsoft Partners with People Inc. Amidst Google AI Challenges
11/4/2025, 8:47:02 PM
People Inc. Enters AI Licensing Agreement with Microsoft
People Inc. has announced a significant AI licensing deal with Microsoft, allowing the company to participate in Microsoft's pay-per-usage AI content marketplace. This development was disclosed by People Inc. CEO Neil Vogel during IAC's third-quarter earnings call on November 4, 2025. Vogel characterized the Microsoft marketplace as an “a la carte” model, contrasting it with the “all you can eat” arrangement with OpenAI. He emphasized that Microsoft is committed to compensating publishers for their content, marking a pivotal moment for the publishing industry in the AI landscape.
Jon Roberts, Chief Innovation Officer at People Inc., expressed optimism about the partnership, stating it represents a critical step toward ensuring fair compensation for publishers' intellectual property. This collaboration is part of Microsoft's broader strategy to work with major publishers to enhance its content marketplace, with Microsoft's Copilot assistant being the initial buyer.
Impact of Google AI Overviews on People Inc.
Despite the promising partnership with Microsoft, People Inc. is facing challenges due to the increasing influence of Google AI Overviews. Vogel reported a significant decline in traffic from Google, dropping from 60% in 2021 to just 24% currently. He noted that the company had anticipated this erosion and adapted its strategy accordingly, allowing it to maintain a scaled audience that reaches half of the U.S. population monthly.
The impact of Google AI Overviews has also been felt in advertising revenue, which saw a 3% decline attributed to reduced referral traffic. Vogel remains confident that the company's diversified strategy will enable it to continue growing despite these challenges.
Criticism of Google's AI Practices
The rise of Google AI Overviews has not been without controversy. A recent incident involving Google's AI model, Gemma, led to significant backlash after it generated false allegations against Republican Senator Marsha Blackburn. Following complaints from Blackburn, Google removed Gemma from its AI Studio platform, emphasizing that the model was never intended for consumer use. The incident highlights ongoing concerns regarding the accuracy and reliability of AI-generated content, with Blackburn calling for stricter controls on AI systems.
Official Statements & Responses
In response to the challenges posed by Google AI Overviews, Vogel stated, “The good news is we’ve maintained our scaled audiences despite this [Google AI Overviews penetration], because we were prepared for it.” He expressed confidence in the company's strategy to navigate the evolving digital landscape. Meanwhile, Google has reiterated its commitment to minimizing inaccuracies in its AI models, acknowledging the ongoing challenges in ensuring factual reliability.
What's Next for People Inc. and Microsoft
As People Inc. embarks on this partnership with Microsoft, the focus will be on building a robust content marketplace that fairly compensates publishers. The collaboration is expected to evolve, with both companies exploring innovative ways to leverage AI while addressing the challenges posed by competitors like Google. The ongoing developments in AI and digital advertising will be closely monitored as the industry adapts to these changes.
