Yahoo has been in talks to buy a Galway-based technology company to gain control of the company's know-how.
The possible deal is unusual. US technology companies rarely buy Irish companies simply to hire the employees and acquire technological know-how.
Yahoo had originally planned to buy SindiceTech for €15m in December but the negotiations collapsed, the Sunday Independent has learned. Talks may now resume.
Any deal would come as Yahoo prepares to move its entire European operations to Dublin from March 21. Yahoo currently has finance back office and customer support functions in Ireland.
Yahoo told the Sunday Independent that last year it had acquired UK-based Summly in a so-called "acqui-hire" to obtain talent and the company's summarisation technology, which then formed the basis of the recently launched Yahoo News Digest app. But Yahoo refused to comment on the Sindice- Tech deal, calling it as "rumour and speculation".
"This would be a staggering deal in the context of Ireland," a tech finance source said.
SindiceTech is a campus company that specialises in helping search engine companies such as Google and Yahoo. The Galway company has created technology that looks for relationships between data beyond simple keyword associations.
SindiceTech is thought to have been advised by Ian Shearer of mergers and acquisitions specialist Atlanta International, who when contacted said he had no comment to make. The company also declined to comment.
Big multinational acquisitions here have been rare. Google bought Dublin startup Green Parrott Pictures in 2011 and transferred the team to its Mountain View, California, headquarters.
"Yahoo have a problem trying to shake up innovation," a Dublin venture fund boss said. "The best way to solve it is to bring in talent and spore innovation. It would be great for Ireland – when tech multinationals start investing in R&D it makes them more sticky."
All of Yahoo's European operations move to Ireland the week after next, including services previously run out of other countries, like Mail, Flickr and Answers and Messenger, Toolbar and Maps, Reuters has reported.
Yahoo, which currently employs around 200 people in Dublin, is moving into a 600-person office, taking three floors at the Point Village.
Yahoo has been devouring startups in the US since 'geek goddess' Marissa Mayer took the helm there, as a way to move on from its old-school reputation, inject new talent and innovate with slick new products.
One of the reasons cited by Yahoo for the move to Dublin is "Ireland's extensive data centre infrastructure".
While many observers suggest the move is tax motivated, Yahoo has denied this. Yahoo is moving its main European tax base to Ireland from Switzerland, which is clamping down on overseas corporate tax incentives.
Last week Apple came in for further criticism when details of its low tax payments in Ireland over the last decade emerged in Australian corporate filings