The New York Post reports that both the search giant and the social network have held talks with Vevo about buying an equity stake as they each compete to land an advertising pact with the service.
Vevo -- a joint venture of Universal Music Group and Sony Music along with the Abu Dhabi Media Co. -- is valued at about $1 billion and an outside investor could help fund Vevo's expansion on multiple platforms as well as acquire music rights outside of its US. base, sources said.
The video sharing site is currently tied up in a deal with YouTube, which will finish at the end of the year, where the platform hosts its videos in exchange for roughly one-third of the ad revenue.
Meanwhile, Vevo has hired investment bank Allen & Co. to explore its options, including bringing in a new investor, selling outright or going public.
Universal and Sony will have to agree on how to proceed as 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 29 percent and Abu Dhabi the remainder.