Yahoo CEO Marissa Mayer and Tumblr CEO David Karp were reported to be in talks last week. On Sunday, the board approved the deal, the Wall Street Journal reported. The deal is expected to be announced as soon as Monday, the New York Times said citing people with direct knowledge of the matter.
It would be the largest acquisition of a social networking company in years, surpassing Facebook's $1 billion purchase of Instagram last year, it said.
For Yahoo and its chief executive Mayer, buying Tumblr would be a bold move as she tries to breathe new life into the company, the Times said. The deal, the seventh since Mayer defected from Google last summer to take over the company, would be her biggest yet.
It is meant to give her company more appeal to young people, and to make up for years of missing out on the revolutions in social networking and mobile devices, the Times said. Tumblr has over 108 million blogs, with many highly active users.
Founded six years ago, Tumblr has raised millions from big-name investors, but is yet to proved that it can be profitable or succeed on mobile devices, which are becoming the gateway to the Internet, the Times noted
The blogging site has been trying to create new ad efforts like interactive campaigns, rather than using standard click-ads, with mixed success, the daily said..
It has set a revenue goal of $100 million for this year; the company reported only $13 million for the first quarter and reported $13 million for 2012.