Google Inc (NASDAQ:GOOG)’s online video portal, Youtube, is in talks with Vevo LLC, the famous music service, to invest nearly 50 million US dollars, according to a media report.
Launched in 2009, Vevo is a collaboration of Vivendi SA (EPA:VIV)’s Universal Music and Sony Corporation (NYSE:SNE)’s Sony Music Entertainment, a video streaming platform that lets you stream and watch music videos from famous artists.
According to the report, this development would result in a 500 million US dollars valuation of Vevo, while Google would own nearly 10 % of the company.
“While we don’t comment on individual negotiations, we always hope to renew our relationships with valuable partners so we can continue to provide YouTube users with the best possible music experience,” Google spokesperson Chris Dale told Bloomberg in an e-mailed statement.
Jennifer Press, a NY spokesperson for Vevo, declined to comment on the matter. If the deal becomes a success, it will be the second time in the past year that the web search giant has directly invested in a video company, which depends on Youtube for distribution.
Rumors had been swirling for months that the video streaming platform Vevo was looking to raise some cash. Similarly, Google Inc (NASDAQ:GOOG) was rumored to buy a chunk of Vevo last month, but no news about the deal was out yet.
Google was looking to acquire an equity stake in Vevo on a valuation of $1 billion in May 2012.
Last year, Vevo and Google also extended their existing contract to keep Vevo’s music videos on Youtube until April.
As part of a contract with Google, due to have expired at the end of 2012, videos from Vevo were hosted on YouTube in exchange for one-third of the advertising revenue.
According to a recent COMSCORE, Inc. (NASDAQ:SCOR) survey, Vevo had an audience of 51.6 million unique U.S. viewers in December
Shares of Google Inc (NASDAQ:GOOG) surged 0.9 % to 765.74 US dollars per share in New York trading, yesterday. Mountain View, California based company’s stock has declined 8.3 % this year.