Having recently made significant acquisitions in the online marketing sector, it is reported that Yahoo! could be looking to buy into the social networking sphere.
The search engine giant is considering a $1 billion (£0.5 billion) bid for Bebo, according to the Telegraph.
This latest bid comes a year after the Californian firm had a similarly-sized bid rejected for Facebook – also a social networking site.
Yahoo! recently followed Google’s consolidation efforts in the search engine and internet marketing sector with the purchase of online ad exchange Right Media for $680 million.
Meanwhile, Microsoft could still be tempted by a bid for Yahoo! as it eyes a way to match Google’s dominance in the search engine marketing field, one analyst has suggested.
Anthony Noto of Goldman Sachs was quoted as saying by the Age: "We believe the odds of a deal happening over time actually increase.
"Microsoft is willing to do deals that are a strategic necessity."