The titans of the Internet realize that their relevance will wane if they can't deliver what netizens really want: videos of Shakira dancing around.
Both Google (GOOG) and Facebook (FB) are vying for equity stakes in Vevo, a New York-based Internet music video service, which is basically MTV (VIA) on a smaller screen, as the New York Post reports.
As broadband speeds, streaming, and cloud storage improves, more and more media becomes viable for the Internet. In the early days of Facebook, sharing multiple photos was prohibitively expensive. As Google and Facebook vie for our undivided attention, video entertainment is one way to keep our eyeballs glued.
Vevo is a joint-venture between Sony (SNY) and Abu Dhabi Media. In April, according to comScore, 49.5 million people viewed music videos on the service in April. This makes it the third biggest video site, after Google and Yahoo (YHOO), with Facebook in fourth place. Facebook has previously tried to partner with Vevo to try to get it to abandon Google's YouTube, where Vevo is the number one partner channel. YouTube gets one third of the ad revenue on Vevo YouTube pages, and that contract expires at the end of the year.
Vevo's CEO Rio Caraeff has said that the company doesn't want to "put all its eggs in one basket," adopting a multi-platform strategy.
The flubbed Facebook IPO caused Kayak, the travel site, to delay its IPO until market conditions improved. This isn't stopping Vevo from considering an IPO, with a reported valuation of $1 billion.
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