Yahoo is reportedly in talks to make an investment in the photo and video sharing service Snapchat.
Having recently raised more than $5bn by selling its stake in the Chinese ecommerce giant Alibaba, Yahoo is now ready to reinvest a relatively modest amount of that cash into Snapchat, according to reports.
While Yahoo is not expected to put a huge amount of money into Snapchat, the investment could give it access to the messaging phenomenon and help Yahoo become more relevant to young consumers. It would also give the company a more strategic stake in mobile technology, an area in which Yahoo has long been seen as a laggard compared with competitors like Facebook and Google.
The young company attracts attention in Silicon Valley circles, particularly because of its popularity in the much coveted millennial demographic. Snapchat, which is based in Venice, Calif., has raised more than $160 million in venture capital; last fall, the company spurned a $3 billion acquisition offer from Facebook.
Though Snapchat has millions of regular users, who send hundreds of millions of photos and videos every day, it has yet to generate any revenue.
Snapchat has been experimenting with ways to distribute content on its popular network. It has worked with musicians, large brands and popular users to figure out different ways to distribute “snaps” — the company’s name for its disappearing messages — that will keep its members coming back regularly.
This could be where the two companies see eye to eye. Ms. Mayer has repeatedly said that Yahoo is a “digital content company at its core” and has worked to increase its content offerings.
Both Snapchat and Yahoo have declined to comment but talks are said to have gathered momentum since ‘late summer’.
