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YouTube Rumored to Be Investing in Vevo

It would be the second time YouTube invested in a content provider


Google‘s (NASDAQ:GOOG) YouTube has tentatively agreed to acquire a minority stake in music video website Vevo, unnamed sources tell AllThingsD.

Terms of the deal remain to be worked out. However, the sources indicated that it would be larger than the $35 million that Google invested in Machinima, a gaming video content provider, in May.

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Both Vevo and Machinima distribute content on YouTube. Vevo provides music videos from major recording label artists, which comprise some of YouTube’s most watched videos.

Vevo is jointly owned by Sony (NYSE:SNE) Music, Abu Dhabi Media and Vivendi‘s (PINK:VIVEF) Universal Music. The deal reportedly includes a long-term licensing agreement that will keep Vevo’s music videos on YouTube.

However, YouTube has often clashed with music labels over videos posted by users on its website. YouTube is currently preparing independent agreements with Universal and Sony over those videos. Disagreements between YouTube and record labels had prompted Vevo to consider moving to Facebook (NASDAQ:FB) last year.

Shares of Google slipped fractionally in Friday morning trading.

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