With its investment in Alibaba going pretty well, Yahoo looks to buys a piece of Snapchat, the popular mobile messaging startup.

Yahoo is in discussions with Snapchat to invest up to US$20 million in the startup, which is valued at US$10 billion. A Yahoo spokesperson refused to comment on the buy-in, however.

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Snapchat was developed by students of Stanford University and launched in September 2011. It gained popularity, mostly amongst teens since it allows users to send photos and text messages that disappear a few seconds after the recipient views it.

By investing in Snapchat, Yahoo might want to repeat its successful investment in Alibaba, China's leading e-commerce company and internet provider. In 2005, Yahoo paid US$1 billion for a 40 percent stake in Alibaba. 

This success helped Yahoo CEO Marissa Mayer gain favor with shareholders even as she works to turn around Yahoo's struggling core search business. Mayer has long been in the hunt for a premium investment to boost the fortunes Yahoo's struggling search engine.

Yahoo is being urged by an investment firm, Starboard Value, to explore diverse ways to unlock shareholder value.

Snapchat earlier refused Facebook's US$3 billion buyout offer, calling it too low at the time. The company has also been courted by a number of investors and potential buyers, including Tencent, another Chinese internet giant.

Yahoo previously purchased yet another startup messaging app, "MessageMe," for an undisclosed amount. Yahoo and MessageMe are developing a new mobile app focusing on creativity and personalization.

MessageMe will shut down Nov. 7. 

TagsYahoo, snapchat, Acquisition, Google's rival, MessageMe