Marie Claire publisher loses a third of its value after warning of AI hit

The publisher behind Marie Claire and Country Life lost a third of its value after warning AI search tools were hitting reader numbers.

Shares in Future, which also owns The Week and price comparison site Go.Compare, crashed by 30pc on Tuesday after it admitted a decline in traffic from Google had been “more pronounced than anticipated”.

Publishers have been left reeling from Google’s rollout of AI overviews at the top of its search results. These are designed to answer search queries using information scraped from websites and have been blamed for sharp drops in the number of people clicking through to sites.

Future said the change had led to a fall in readership, denting its advertising and e-commerce revenues and driving up the cost of ad spots across the industry.

The company warned that revenue would decline by a low single-digit percentage in the second half of the year. This could mean a fall of anywhere between 1pc and 5pc.

The share slump wiped almost £100m off the company’s market value. Future has suffered a collapse over the past five years, with the company’s value down 90pc since 2021 as shares fell from nearly £40 each to just £2.75 today.

According to the Reuters Institute, traffic from Google is down by a third to news sites because of the AI change and news outlets expect it to plunge a further 43pc over the next three years.

The Competition and Markets Authority said in January that Google will have to let publishers decide whether they appear in AI summaries after the News Media Association – which represents titles including The Times, The Guardian and The Telegraph – accused the tech giant of “exploiting” its dominant position in search.

Google will also be banned from “manipulating” its search results by retaliating against companies that criticise it or favouring businesses that spend heavily on Google advertising. Google denies engaging in such practices.

Nevertheless, the rollout of the new technology is still hurting free-to-read websites reliant on digital advertising.

Reach, which publishes The Mirror and Daily Express as well as dozens of regional titles, suffered its biggest loss in more than a decade last year following a drop in reader numbers.

Future has launched an initiative called “Google Zero”, aimed at reducing its reliance on search referrals for revenue.

The publisher is instead seeking to make more money directly from its readers and is offering new services such as helping brands become more visible on AI services such as ChatGPT.

Future said its takeover of SheerLuxe, a social media-based beauty and fashion brand, was progressing well and that price comparison site Go.Compare had returned to growth.

The Future board said it believed the company was fundamentally undervalued and would explore options for brands that were not delivering value for shareholders.

Kevin Li Ying, the chief executive, said: “Whilst we are disappointed with the impact of the changes in the search ecosystem on our near-term trading performance, we are making good progress in executing the elements of our growth strategy that are in our control.

“This includes a laser focus on driving the platform effect to optimise monetisation across our brands through our Google Zero strategy and leveraging AI as a new source of revenue through products like Future Optic.

“The board remains determined to drive a return to growth and to unlock the substantial value from our unique portfolio of assets.”