I can find no where any mention of money exchanged either from Google for the rights or for a revenue stream to support the ongoing work, although one can purchase prints of the images.  From a post on this from paidcontent.org:

  Time Inc.’s hopes, Life president Andy Blau explains: “We did this deal for really one reason, to drive traffic to Life.com. We wanted to make these images available to the greater public … everything else from that is really secondary.”  

While exploring the collection, I also noticed Google’s Image Labler, a game to tag images.  The goal of the game is to get points by matching your tags with those of another random player, when you both see the same images.  The game was launched in September of 2006. While I spent about 5 minutes using it, what is truly scary is the number of points raked up by the “all time leaders”. As of today, “Yew Half Maille” had collected 31,463,230. Considering that I collected about 4,000 points in my 5 minutes, how much time are people spending doing this?