It's a video sight that includes advertising. They are using it in order to make money off of thevideos that are shown by having advertisements shown there and having the advertisers pay to show the advertisements. Youtube moved their most popular videos there first.
Companies like Warner who had their videos removed from Youtube are in talks to maybe allowing their videos to be shown on Vevo.
Here is what wikipedia says:
Vevo is a music video and entertainment website. It is owned by Sony Music Entertainment, Universal Music Group and Abu Dhabi Media Company.[1] The service was launched officially on 8 December 2009.[2] The video hosting for Vevo is provided by YouTube, with Google and Vevo sharing the advertising revenue.[3] Vevo offers music videos from three of the four major record labels, Universal Music Group, Sony Music Entertainment and EMI.[4]
One of the reasons cited for the launch of Vevo is the competition that music videos have on YouTube. Warner Music Group apparently removed its content from YouTube in March 2009 for this reason, but is said to be considering hosting its content on Vevo.[5] The concept for the site is described as being a Hulu for music videos,[3] with the goal being to attract more high-end advertisers[6]. It is believed that some advertisers are ambivalent to hosting advertising on the YouTube site alongside user-generated video.[3] In the future, the site could host more than just music videos, such as editorials, other types of videos, and user-generated content.[3]
Universal registered the domain name vevo.com on 20 November 2008.[5] Sony Music Entertainment reached a deal to add its content to the site in June 2009.[7] On 18 November 2009, Vevo announced that the service would be launched at a party in New York on 8 December.
Like YouTube, Vevo uses the Flash video format for its content. The player size is 850 x 480 pixels, which is designed to offer higher picture quality than the current default formats on YouTube.[8]
The Vevo website is currently available only to viewers in the United States and Canada. Viewers with an IP address outside these countries will see the message "We're sorry, VEVO is not currently available in your country. Please stay tuned." The Vevo artist channels are available to view worldwide on YouTube, although some of the videos may produce the message "This video contains content from Vevo, who has decided to block it in your country."[9]