Yahoo acquires mobile app created by former employees

Yahoo Inc. offices, housing its Search Marketing Group, are pictured in Burbank, California, October 14, 2010.

SAN FRANCISCO (Reuters) - Yahoo Inc acquired a small mobile start-up company that was founded by former employees of the struggling Web portal two years ago.

Yahoo did not disclose the price of its deal to acquire Jybe, which developed a mobile app that recommends movies, books and restaurants based on data contained in social networks.

Yahoo said it would shut down the Jybe service, while five Jybe engineers and data scientists, all ex-Yahoo staffers, would focus on Yahoo's efforts to bolster its product line-up.

Since Marissa Mayer became Yahoo chief executive in July she has made several small, so-called acqui-hires, similar to the Jybe deal, that have brought small teams of software engineers focused on mobile products to Yahoo. Wednesday's deal comes amid media reports that Yahoo is also in talks to acquire a controlling stake in video website Dailymotion from France Telecom-Orange, which would represent Mayer's biggest deal to date.

Shares of Yahoo were off 15 cents at $22.02 in midday trading on Wednesday.

(Reporting By Alexei Oreskovic; editing by Gunna Dickson)