Yahoo Headquarters

Yahoo is reportedly in "serious" talks with Tumblr about a possible acquisition, rumored to be somewhere in the $1 billion range. The online company is apparently hoping to find its footing with younger crowds—Yahoo's demographic is largely made up of older readers—and deeply believes Tumblr is just the platform. According to AllThingsD, Yahoo's Marissa Mayer has had the blogging service in her sights for quite some time, going back to her stint at Google.

Mayer has allegedly met with Tumblr's top execs, including young CEO David Karp. It's unclear how far along talks are, but if Yahoo is already considering an offer, it sounds like the earlier meetings have gone well. While Yahoo's core demographic continues to age, the company has found it difficult to attract younger users. And this move could be the jolt Yahoo needs—Yahoo CFO Ken Goldman even admitted the company has struggled to extend beyond its aging demographic.

Tumblr's own traffic reached 117 million visitors in April, comScore said, while desktop traffic was 37 million that same month—that puts the service on the same plane as LinkedIn and Twitter. The acquisition might actually be beneficial to both parties. While Yahoo attempts to find a younger audience, the online company could also use Tumblr as an advertising platform to bring in revenue, something Karp and has Tumblr team has (mostly) failed to do.

Yahoo has declined to comment on the rumor, but it sounds like something very significant is in the works. Tumblr is an immensely popular service mostly driven by the exact audience Yahoo wants to reach. But is that audience worth $1 billion? Apparently so.