Yahoo in stake talks with social blogging site Tumblr

Yahoo Inc is in talks to invest or acquire social blogging site Tumblr, valuing the New York-based company at $1 billion, Allthingsd.com yesterday reported, citing  sources close to the situation.

Yahoo could have a strategic alliance and investment in or outright buy Tumblr, which has been stepping up its efforts to raise a large funding round that could value it at $1 billion.

Talks are fluid between the two companies, but there is a possibility that a deal could be done as soon as this weekend, said the report. 
 
Founded in 2007 by David Karp and Marco Arment, Tumblr  is a microblogging platform and social networking website, which allows users to post multimedia and other content to a short-form blog.

Tumblr lets a user share and post text, photos, quotes, links, music, and videos from browser, phone, desktop or email.

Its worldwide traffic was at 117 million visitors in April, according to comScore, while Tumblr claims it has 107.8 million blogs and 50.6 billion posts.

Tumblr has raised $125 million from investors that include Union Square Ventures, Spark Capital, and Sequoia Capital, Greylock Partners, Insight Venture Partners.

The potential deal comes a few weeks after the French government torpedoed Yahoo's plans to buy  a controlling stake in popular online video website  Dailymotion, owned by France Telecom, and the 12th-largest video website in the world by unique users.
The deal had been torpedoed by Frence's controversial industry minister Arnaud Montebourg, who did not want one of France's most successful start-ups being "devoured" by Americans.

The rejection has now opened the possibility of French mass media company Vivendi buying Dailymotion (See: After Yahoo, Vivendi now offers to buy online video-sharing service Dailymotion).