Facebook and Google Want a Piece of Vevo

Both Facebook and Google are looking to invest in music-video service Vevo, according to reports.

Sources say that the search titan and social network have been in negotiations with Vevo to buy an equity stake, the New York Post reported. Both are competing for ad revenue from the service. Vevo is a joint venture between Universal Music Group, Sony Music and the Abu Dhabi Media Co. and valued at $1 billion. It reportedly has $150 million in annual revenue.

Right now, Vevo does license its content already to Google's YouTube as well as streaming videos through mobile apps and its website. However, its YouTube deal -- which gives Vevo a third of the ad revenue -- is over at the end of the year. While it negotiated with Google, it also started talking with Facebook. 
Vevo does have some power in the talks. It had 48 million unique visitors in April and is the third-biggest online video destination (following Google and Yahoo.) But while a regular startup might consider just selling it all, it is partly owned by Universal and Sony, who may have different agendas. Currently, Universal has 51 percent and Sony has 29 percent of the service.
None of the companies involved commented on the report.
Music, along with music videos, is popular with younger users -- something that Google and Facebook know. So will Google be willing to take a hit on ad revenue rather than let Facebook get Vevo? Our vote here is yes, but Facebook's chief executive Mark Zuckerberg is known for making impulsive billion-dollar deals, so Vevo could find a more lucrative deal with the social network. 
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