Yahoo! is rumoured to be weighing a $1 billion (£500m) bid for Bebo, the privately owned social networking site, after shuffling its management team to better place itself for acquisitions.

Bebo, which is based in San Francisco but counts the UK as its strongest market, has insisted so far that it is not up for sale and that it intends to concentrate on organic growth ahead of a possible stock market float.

The company, whose site allows users to “chat” to each other and share photographs and videos, was founded in 2005 by Michael Birch, a Briton, and his American wife, Xochi. It has about nine million users in the UK and about 31 million worldwide.

Given Bebo’s strength in Britain, an approach by Yahoo! would be likely to involve Toby Coppel, the Yahoo! executive who previously led the company's global mergers and acquisitions team and was recently appointed managing director of the group's operations in Europe.

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The deal would be the latest in a flurry of takeovers in the internet sector in recent weeks, as large sums of ready cash chase a limited pool of assets. On Friday, Microsoft announced that it had agreed to buy aQuantive, the online advertising group, for $6 billion.

That deal followed Google’s $3.1 billion acquisition of DoubleClick, the largest broker of display advertising on the web, and Yahoo!’s buyout of 80 per cent of RightMedia, which specialises in placing adverts on social networking sites such as Bebo, for $680 million.

Yahoo! was also said to be eyeing Facebook, another social networking site, for which it was said to be willing to pay $1 billion.

After failing to seal that deal, recent changes among Yahoo!’s management suggest that the embattled web giant is placing a heavier emphasis on acquisitions as it struggles to keep up with Google, the leader in online advertising.

Earlier this month, the group hired Blake Jorgensen, a veteran Silicon Valley dealmaker, as its new chief financial officer. Mr Jorgensen, who co-founded Thomas Weisel Partners, the technology-focused investment bank, in 1998, replaced Susan Decker, who was promoted in December to oversee advertising sales.

Mr Jorgensen, who will oversee Yahoo!’s acquisitions strategy, had previously advised on some of Yahoo!'s biggest deals, including the $300 million acquisition of Inktomi in 2002 and the $4.5 billion acquisition of GeoCities in 1999.

In recent weeks Yahoo! was speculated to be a takeover target itself, with Microsoft said to be weighing a $50 billion-plus bid for the company.

Yahoo! would not comment today.

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