• by Gavin O'Malley  @mp_gavin, October 6, 2014

With its windfall from Alibaba’s IPO, Yahoo is reportedly close to investing around $20 million in Snapchat at a valuation of $10 billion. Ironically, the Chinese e-commerce giant -- in which Yahoo co-founder Jerry Yang took a 40% stake in 2005 -- was said to be pursuing a piece of Snapchat, this summer.  

Yahoo showed a willingness to place big social bets before it sold a portion of its Alibaba holdings for more than $9 billion last month. Most notably, the Web veteran agreed to pay about $1 billion for Tumblr last year.

A Snapchat investment -- which has yet to be finalized, per The Wall Street Journal -- would position Yahoo at the popular intersection of sort-of-anonymous social media and mobile messaging. 

Of course, some notable investors have said they expect the anonymous social networking trend to be short-lived. Yet the numbers continue to tell a different story.

Snapchat experienced the highest growth in time spent in July, with total minutes up 114% year-over-year -- from 2.6 billion to 5.5 billion minutes -- according to a recent note from JPMorgan, citing comScore data. (To put those numbers into perspective, Facebook saw its time spent rise from 137 billion to 178 billion minutes, during the same period.)

Naturally, Snapchat’s success has led to a lot of investor interest. As recently as August, Kleiner Perkins was reportedly ready to place another big bet on the company. To date, the highly visible venture capital firm has already invested upwards of $20 million in the messaging service.

All told, Snapchat has raised roughly $100 million from Lightspeed Venture Partners, Benchmark and Institutional Venture Partners, among others. Some industry watchers say Snapchat’s popularity is bad news for advertisers because it represents a turn toward personal privacy and digital anonymity.

Snapchat, however, has every intention of making its network a friendly place for brands. Among other efforts, the company is reportedly developing a new service, dubbed Snapchat Discovery, which will “show content and ads to Snapchat users,” WSJ reported this summer. Sources told WSJ to expect Discovery to debut by November.

The company also recently added location-based filters to its growing list of personalization features, which hinted at some big opportunities for brands. Indeed, a video demonstrating the “geofilters” featured users snapping selfies in front of a SoulCycle, a Groundwork coffee shop and Disneyworld. Suggesting a clear path to promotional initiatives, each location offered visitors branded images to include in their snaps.

Upon its launch in July, agencies and social media pros said they saw dollar signs in the new feature. “For brands, while it's still a fairly shallow way to engage with the program … the opportunity to position a logo on snaps taking place at a retail or event location is of course an attractive prospect,” said Grace Gordon, strategy director at social agency We Are Social.

Many on Madison Avenue have been happy to experiment with Snapchat. Following Taco Bell’s lead, McDonald's joined the service earlier this year, while Heineken recently relied on Snapchat to connect with festival-goers at Coachella.

Among brands, other early adopters include Juicy Couture, Seventeen, NPR and HBO's "Girls." To bolster its business side, Snapchat also recently poached the global director of Facebook’s Preferred Marketing Developer program, Mike Randall. Randall officially serves as vice president of business and marketing partnerships at Snapchat.

For a while, vanishing pictures helped Snapchat stand out in a messaging market dominated by giants like Facebook and Apple. Yet the company has been pushing into other areas, such as live-event coverage and more mainstream mobile messaging services.

For example, the company recently hitched its “Our Story” feature to FIFA’s World Cup final. The service’s entire community was given access to a stream of curated content created by those lucky enough to attend the big game between Argentina and Germany.

Snapchat debuted “Stories” late last year -- a feature that lets users save and share photos for up to 24 hours. Adding a collaborative component to the service, the start-up more recently unveiled “Our Story,” so people at the same events can combine their own “snaps” into a single “story.”

Snapchat also recently rolled out a text- and video-messaging feature named Chat, while making it easier for users to save their exchanges with friends.

Regarding a potential tie-up, Yahoo and Snapchat representatives declined to comment on Monday.