"As of today, Del.icio.us is part of the Yahoo family," wrote Jeremy Zawodny, a well-known Yahoo blogger and MySQL specialist working for the internet portal.
Yahoo refrained from sending out an official statement on the deal, and terms and conditions have not been disclosed.
Zawodny said that Yahoo plans to integrate Del.icio.us with Flickr, an online photo service which it acquired last March.
Del.icio.us allows users to bookmark and tag websites which they find useful. This enables individuals to view the favourite websites of friends and co-workers. The tagging feature also allows users to find sites or news on related topics.
The site has nine employees and is backed by venture capital investors. The service claims to have about 300,000 registered users.
Digg has witnessed a surge in popularity in the past year, and received $2.8m in venture capital funding in October.
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