People Inc. Prepares for 'Google Zero' as AI Overviews Drive 26% Drop in Web Sessions

Digital media publisher People Incorporated is accelerating an internal contingency plan dubbed "Google Zero" to decouple its commercial model from web search, following years of declining referrals that culminated in a 26% drop in web sessions during the third quarter.

Executives speaking on the company's third-quarter earnings call, reported via Yahoo Finance, said search referral erosion has worsened as search engine mechanics change. Chief Financial Officer Tim Quinn noted that Google AI Overviews now appear on more than 90% of the search queries tracked by the publisher. Over the past several years, the company has shed nearly 70% of its search traffic from Google, compressing the legacy ad impressions that historically funded digital editorial operations.

The traffic contraction weighed on third-quarter performance. Digital revenue increased 2% year over year, slowing from 6% growth in the second quarter. While legacy sessions-based revenue fell 6%, non-sessions-based revenue grew 15%, buoyed by content licensing, syndication, events, and social video. Chief Executive Officer Neil Vogel acknowledged that while newer revenue lines expanded at pace, legacy traffic declines created a larger drag than management had projected.

To counter search volatility, Vogel said People Inc. has been actively retooling distribution to reach consumers directly rather than relying on algorithmic search discovery. During the quarter, the company launched paid digital tiers MyRecipes+ and PEOPLE VIP, expanded its social-video portfolio to more than 50 active series, and increased connected-TV ad targeting through its D/Cipher technology. Vogel also pointed to franchise monetization, reporting that revenue tied to People magazine's "Sexiest Man Alive" franchise climbed 50% year over year as coverage expanded across podcasts, mobile apps, YouTube, and Apple News.

Licensing revenue jumped 49% in the quarter, supported by content distribution deals across Apple News and commercial artificial intelligence developers, alongside long-standing retail agreements such as the Better Homes & Gardens product line at Walmart. Management indicated that sessions-based revenue and traffic could begin to stabilize next year, though absolute volumes of search-directed visitors may continue to decline.

The strategic pivot has triggered structural cost cuts. People Inc. eliminated 195 jobs, or roughly 6% of its workforce, in late October. Quinn said capital and personnel are being systematically moved away from legacy print and web functions into higher-margin digital distribution. Full-year corporate EBITDA guidance for People Inc. was refined to between $330 million and $345 million on expected mid-single-digit revenue growth, while total holding-company EBITDA is projected at $263 million to $283 million. Corporate overhead run rates are forecast to decline to roughly $45 million by the end of the first quarter of next year.

Capital allocation is also shifting following the termination of talks surrounding casino operator MGM. Chairman Barry Diller said People Inc. concluded discussions about taking MGM private and rejected an inbound acquisition proposal from MGM, concluding the timing was not right for a sale. An agreement between the companies caps People Inc.'s direct share purchases of MGM at 29.9%, lifting prior restrictions and clearing People Inc. to resume repurchasing its own shares.

Management said future acquisitions will remain limited to targeted, capability-focused transactions rather than large-scale purchases, following recent bolt-on deals for food influencer network The Feedfeed and food-event company Hot Luck. The company also continues to pursue antitrust litigation against Google regarding digital advertising technology, where Quinn indicated potential claims could reach nine figures, with a potential resolution anticipated in 2027.