Yahoo is on the verge of buying online content-sharing site Tumblr in a $1.1bn deal.
The acquisition could be announced later today, and would be the biggest of the 10-month reign of chief executive Marissa Mayer as she tries to attract more traffic and advertisers to the internet company's website and mobile applications.
The Sunnyvale, California, company's board of directors were meeting last night to consider approving the deal, and Yahoo has promised to unveil "something special" this evening in New York.
The event is being held in a Times Squares lounge located about two miles from Tumblr's headquarters.
Yahoo has only said that Mayer will be on hand to unveil something related to a product, and buying Tumblr would fulfil her goal of reaching a wider audience on smartphones and tablet computers.
Tumblr serves up a constantly changing collage of stories, photos and other digital content provided by users who are increasingly connecting to the service through its mobile applications.
The service is also one of the hottest sites among teenagers and young adults, a demographic that Mayer, 37, thinks Yahoo needs to do a better job of reaching.
If it is completed, the Tumblr deal would be her biggest coup – and, at the same time, the biggest risk – since she ended her 13-year career as a key executive at Google to try to snap Yahoo out of a prolonged malaise that had demoralised employees and investors alike.
Since her arrival, Ms Mayer has been focused on redesigning several Yahoo services and bringing in more mobile engineering talent, primarily by buying a series of small start-ups.
None of those previous acquisitions have required Yahoo to dip too deeply into its bank account.
Late last year, Yahoo paid a total of $7m for two start-ups called OnTheAir and Stamped. In the first three months of this year, Yahoo snapped up three more start-ups for a total of $10m.
Tumblr, founded in 2007 by its chief executive David Karp, would presumably become a pivotal part of Mayer's effort to sell more advertising.
She has been winning back investors, even though the company's revenue is still lagging the overall growth of the booming internet and mobile advertising market. Yahoo's stock price has risen 69 per cent under her leadership.