In a report by The Wall Street Journal, Google recently took up a 7% stake in Vevo, a Youtube channel that serves up music videos and other music related videos. According to WSJ's sources, Google paid an estimated US$45 million for its stake, which puts Vevo's valuation at about US$650 million.
Vevo is currently the Youtube channel with the most views, and has been on Youtube for about four years. Its main source of income, estimated to be hundreds of millions of dollars -- which it shares with Youtube -- is from ads that are served alongside its videos.
WSJ's sources also indicated that Vevo had been in talks with other technology companies like Facebook, Apple, Amazon, Twitter and Microsoft among others to help distribute music videos from major music labels (who also have large stakes in Vevo).
The move marks the second time Google has taken a stake directly in a video content company. Last year Google invested in Machinima, another top creator of videos on YouTube, which gets more than a billion unique visitors per month, according to the company. Google said in a statement Wednesday that it was “excited by their future prospects and to provide YouTube users with the best possible music experience.” Vevo said it wouldn’t comment about the deal.
Source: The Wall Street Journal: Digits