As Facebook Sets Venture With Vevo, Is A Buyout Far Behind?

Google’s (NASDAQ: GOOG) YouTube is the largest video site in the US in terms of videos viewed each month, according to Comscore. VEVO is second. The gulf between the two was huge in January. YouTube had almost 152 billion unique visitors. VEVO had only 51 million. But, second place is still valuable in a world in which video ads pay much more that static ones.

VEVO has set a joint venture with Facebook so that users of the video site can log on through the social network, according to The New York Post. VEVO already has a deal to show its videos on YouTube and the two companies share advertising revenue from this.

Facebook needs something to embellish its already trouble IPO process. Investors have been critical of its weak strategy to sell ads. And, Facebook has done poorly, from a revenue standpoint, on mobile platforms.

Facebook’s next move could be a complete buyout of VEVO. It would give Facebook access to a video platform its needs to offer even modest competition in Google in the sector.

And, a VEVO buyout would strengthen Facebook’s relationships with premium media companies. The Post reports that

Vevo, owned by Universal Music Group, Sony Music Entertainment and the Abu Dhabi Media Co., pulled in $150 million in ad revenue last year

And, if a buyout was done before Facebook’s IPO, the music companies might be able to get stock and have their stakes become liquid in the process