YouTube to Acquire 10 Percent Stake in Vevo (Report)

Google-owned YouTube is set to take a stake of around 10 percent in online music destination Vevo, AllThingsD reported.

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The deal on the table would include an investment worth an estimated $50 million and the renewal of a distribution agreement, which has been in place for three years. The renewal would keep hundreds of millions of music clips and videos on YouTube.

The overall deal  hasn’t been signed and could still be derailed at the last minute, AllThingsD said. 

Vevo was founded by music majors Universal Music Group, part of Vivendi, and Sony Music and launched in late 2009. The two labels are investors in Vevo along with Abu Dhabi Media. EMI is also providing music to the joint venture.

Vevo, which has an online video service backed by the other major global record company label Warner Music to look at improving the revenues it can feed back to the music industry, has also looked at distribution deals with Facebook and Viacom/MTV, according to past reports.

Google last year also invested $35 million into Machinima, a Web video network aimed at gamers, that relies on YouTube for distribution.

"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," said a YouTube spokeswoman.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai