Yahoo's board has approved a deal to buy New York-based blogging service Tumblr for $US1.1bn, media reports in the United States say.
The acquisition is expected to be announced as early as Monday, the BBC reports.
If confirmed, it will be CEO Marissa Mayer's largest deal since taking the helm of Yahoo in July 2012.
Under the terms of the acquisition, Tumblr would continue to operate as an independent business, the Wall Street Journal said, citing unnamed sources familiar with the situation.
The company is currently run by David Karp, a 26-year-old New Yorker who founded Tumblr in 2007, and he is expected to remain in his role.
Analysts say that by acquiring Tumblr, Yahoo will gain a larger social media presence and enhance its ability to attract younger audiences in its battle with internet rivals Google and Facebook.