Google Looking At Big Investment In YouTube Video Creator Machinima

david lawee googleDavid Lawee, who oversees Google’s M&A strategy.

Photo: Business Insider / Matthew Lynley

Google is reportedly close to investing $30 million in Machinima, a leading creator of YouTube video content.The deal, which was first reported by AllThingsD, would mark the first time Google has made a direct investment and taken an equity stake in a producer of original content.

Machinima exclusively makes videos about video games. It is the fourth-most popular channel on YouTube, with more than 4 million YouTube subscribers, and delivers more than 1.6 billion video views per month.

Google did pay out at least $100 million to spur the creation of more than 100 dedicated “channels” for YouTube, with content from celebrities like Madonna, as well as news from sources like Thomson Reuters and the Wall Street Journal.

But those payments were more like up-front guarantees — similar to how a record label would offer an advance to a recording artist, then hope to earn it back over time.

By taking a direct stake, Google might be able to get Machinima content for other purposes than YouTube — like for the rumoured pay TV network it’s building as part of its fibre optic rollout in Kansas City.

It also stands to make some money if Machinima turns into a hugely profitable business. Just like Microsoft has been able to do with Facebook.

See also: The 14 Hot L.A. Startups You Need To Watch

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