YouTube mulling $50 million investment in Vevo -- report

If YouTube drops that cash into Vevo, it will own less than 10 percent of the music video service.

Screenshot by Jonathan Skillings/CNET

YouTube might soon invest some cash in Vevo, according to a new report.

Google's video site may be investing $50 million in Vevo, a joint-venture music-video site established by Universal Music and Sony Music Entertainment for music videos, according to a Bloomberg report today, citing people who claim to have knowledge of the negotiations. In return for the $50 million, YouTube would acquire less than 10 percent of the company, indicating Vevo might be valued at over $500 million.

Perhaps more importantly for Google, the deal would also ensure that Vevo's music videos stay on YouTube, according to Bloomberg.

Rumors have been swirling for months that Vevo is looking to raise some cash, and Google might just be the company to help it do so. In May, for example, the New York Post reported that Google was looking to acquire an equity stake in Vevo on a valuation of $1 billion. It was believed at the time that Facebook might also try to acquire equity in Vevo.

The YouTube-Vevo investment rumor was rekindled last month in a report from All Things Digital. That report didn't include mention of the possible investment.

CNET has contacted YouTube for comment. We will update this story when we have more information.

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