The demand for Vevo is rivaling the early 80’s jonesing for MTV as Google’s Larry Page (above) and Facebook’s Mark Zuckerberg go exploring for a piece of the hot video streamer. (ABACAUSA.COM)
It’s a battle of the tech brands.
Both Google CEO Larry Page and Facebook’s Mark Zuckerberg are exploring an investment in Vevo as part of a broader partnership with the music-video service, The Post has learned.
Sources say the search giant and the social network have held talks with Vevo — the digital equivalent of MTV — about buying an equity stake as they each compete to land an ad pact with the venture.
An outside investor could help fund Vevo’s expansion on multiple platforms as well as acquire music rights outside of its home base here, sources said.
Vevo — a joint venture of Universal Music Group and Sony Music along with the Abu Dhabi Media Co. — is valued at about $1 billion on revenue of $150 million, according to industry sources.
Vevo licenses its content to a number of partners, including Google’s YouTube and MTV.com, in addition to streaming videos at Vevo.com and through mobile apps.
Vevo’s current deal with YouTube to host its videos in exchange for roughly one-third of the ad revenue is up at year-end. While it negotiates with YouTube to accept a smaller cut of ad sales, Vevo also has opened talks with Facebook.
“The deal with YouTube is done at the end of the year,” said a source familiar with the talks. “Between now and then, we want to explore all the possibilities.”
Another source added: “It makes sense that Google and Facebook would talk about an equity position.”
Meanwhile, Vevo has hired investment bank Allen & Co. to explore its options, including bringing in a new investor, selling outright or going public.
One source confirmed the talks with Google and Facebook, but said it’s unclear how serious either party is about buying a stake in the video streamer.
Nevertheless, the service is a useful chess piece for both tech giants, which consider music key to attracting online audiences and ad dollars.
Vevo is YouTube’s top partner channel, garnering 48 million unique viewers in April, according to ComScore. Overall, Vevo is the third-biggest online video destination, trailing only Google and Yahoo!, while Facebook comes in fourth.
Not surprisingly, Vevo, run by CEO Rio Caraeff, has a few courses to follow. It could choose to distribute its music content exclusively with either YouTube or Facebook and bring in either one as an equity partner.
It could also wait out the rocky initial public offering market and go public at a later date, or the owners could sell the entire property and pocket the cash.
Complicating matters is that Universal and Sony will have to agree on how to proceed. Selling equity in the venture would require one or both to dilute their stake. Vivendi-owned Universal controls 51 percent of Vevo, while Sony holds 40 percent and Abu Dhabi the remainder.
Reps for Vevo and its backers declined to comment. Google wasn’t immediately able to comment. A Facebook spokeswoman said the company doesn’t comment on rumors.