Yahoo buying Tumblr...or maybe not

Valleywag reports that Yahoo is in negotiations to by cut down blogging service Tumblr.

According to Owen Thomas, the talks are being led by Yahoo's Tapan Bhat and the asking price is low to mid eight figures.

AllThingsD though reports a flat out denial from Tumblr.

Although the price might be a little high, the service would be a good fit for Yahoo. Yahoo has lacked in social networking and blogging like services since announcing the closure of the poorly performing Yahoo 360, and it's a gaping hole that could do with filling. Tumblr also appeals to Yahoo's younger demographic, and would fit in nicely alongside services such as Flickr and Delicious.

Still, it would be surprising to see Yahoo spending at a time it's making sweeping cuts and closing services.