Universal Music Group (UMG) is reportedly teaming up with viral video sharing giant YouTube for an online music video venture set to launch later this year, which will include the music label's entire catalog.

According to the Associated Press, the new venture is called Vevo, where YouTube will supply the technological expertise, while UMG will supply the content. The companies will then share ad revenue.

The site appears that it will only feature content from artists UMG represents. However, Universal's top exec Doug Morris said, via a conference call, that they are in negotiations with other labels to hop onboard. UMG is the largest of the four top recording company in the music biz.

"We believe that video is the best opportunity for revenue generation right now," Rio Caraeff, executive vice president of Universal's eLabs digital business strategy unit, told the AP.

"The advertisers and brands are more comfortable with video as a vessel for their message and their advertising spend. Streaming audio is harder to monetize under an ad-driven model right now."

According to CNN.com, UMG has long wished for a standalone music-video service, and the deal with YouTube is exactly what they were looking for. When MTV rose on the scene and huge financial success by offering music videos on TV, the record industry realized that they made a mistake by thinking of music videos as a promotional tool. Morris has said that in this era of declining revenue in music, he doesn't see anything as "promotional" and argues that music videos are worth cash.

For Google, who acquired YouTube in 2006, the move continues in the company's partnerships with top entertainment companies.

CNET reported this week that Google is also in talks with licensing some full-length films with Sony Pictures on YouTube.

"We believe that at launch, Vevo will already have more traffic than any other music video site in the United States and in the world," Morris said in a statement." And this traffic represents the most sought after demographic for advertisers, especially as advertising dollars continue their shift from old media to new."

Google said that previously, YouTube's relationship with major content creators like recording labels has been "fraught with tension and animosity and sometimes lawsuits."

"There hasn't been a genuine partnership that I think this model represents," David Eun, Google's vice president of strategic partnerships, said.

Vevo.com is expected to launch later this year.