Yahoo would not reveal how much it had paid for the company, although the company confirmed the deal today.
Xoopit works by sifting users' inboxes for photos and in turn offering options for organising and redistributing them to various social media sites.
Bryan Lamkin, of Yahoo's application division, said Xoopit is the most popular third-party app in Yahoo Mail.
Explaining why the deal was struck, he said Yahoo Mail is "actually home to one of the largest online photo repositories in the world" and the addition of Xoopit makes "it all that much easier for you" to share photos.
He added: "With the integration of Xoopit's platform technology and capabilities, the task of sending photos via e-mail will be as easy as it should be and sharing photo albums with friends and family members will also be a cinch.
"In short, Xoopit will bring phenomenal photo organization, improved photo sharing and the serendipity of discovering forgotten photos to Yahoo Mail."
News of the acquisition follows Yahoo's announcement yesterday that global revenue fell 13% to $1.573bn and profit tumbled by a quarter to $76m year on year in Q1 2009.
The group has been particularly hard-hit by contracting advertising revenue from both search and display.
Marketing services revenue from Yahoo-owned and operated sites were down 16% compared to the same period in 2008, to $858m.
The shortfall was fuelled by a 15% drop in search ad revenue and a 14% decline in display.
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