Koprol enables people with mobile phones to find and read reviews of local businesses. In addition, users can see the location of others, what they are doing and start or join discussions based on particular places.
Yahoo, which did not release financial terms, said Koprol would provide the portal with more services to attract the growing number of people using their mobile phones for social networking and Web browsing.
"Koprol was uniquely designed for mobile phones and within a year has already built a strong user base," Rose Tsou, Yahoo's senior VP of Asia, said in a statement released Monday. "Yahoo provides the global scale and technology to accelerate growth in Indonesia as well as introduce the service to new markets."
To provide its services, Koprol aggregates a database of locations within a city, based on information gathered through users. Yahoo plans to leverage this information to make its Web sites, applications, homepage and media and communications products more locally relevant.
Koprol said in the company's blog that it would continue operating under Yahoo, and would be able to launch features faster, including mobile apps, an Indonesian language version and business accounts.
"For us, joining a company like Yahoo was an easy decision to make and will take Koprol to the next level," the company said.
Before the Koprol deal, Yahoo was reportedly considering a $100 million bid for a U.S. location-based mobile services company, Foursquare.
The market for location-based services is growing as the number of mobile phones with global positioning systems rises. The market for such applications and services will reach $13.3 billion by 2013, ABI Research predicts.
Yahoo announced the Kobrol deal the same day it unveiled a deal with handset-maker Nokia to build Yahoo e-mail, search and other applications and services into a range of Nokia devices.