Yahoo shares surged after being fuelled by rumours of a buyout by AOL.
According to news agency Reuters, the shares jumped by almost 9 per cent after reports of a possible buyout circulated around Wall Street.
A source claimed on Wednesday that several private equity firms had approached huge media houses, including AOL and News Corp., about a possible acquisition of Yahoo.
Reuters reports that Yahoo's stock prices went past $17 per share during the pre-market trade, but were at $16.72, up $1.47 or 9.6 per cent when the market opened for trading. The share price is the highest Yahoo has seen since May this year.
The source who revealed the news also said that the company had not been approached by private equity firms just yet.
Yahoo, which has the second most popular search engine in the world behind Google, is working hard to get back into the game by outsourcing its search services to Microsoft's Bing and focusing more on online media content generation and online advertising.