However, Time Inc is hoping that Yahoo will allow bidders to form consortiums after they submit first-round bids that are due on April 11, the people added. Time Inc has not yet selected any private equity firm as a potential partner, the people said.
Several private equity firms are weighing bids for Yahoo's internet assets including Blackstone Group, KKR & Co, TPG Capital, Apax Partners, Warburg Pincus, Bain Capital and Hellman & Friedman, the people said.
A potential deal structure that Time Inc and its investment bankers have been considering is a Reverse Morris Trust, the people said. This could potentially allow Yahoo to divest assets in a tax-efficient manner, the people added.
Spokespeople for Yahoo, Time Inc and the private equity firms declined to comment.
Since Time Inc spun out from parent company Time Warner Inc in 2014, its chief executive, Joe Ripp, has been vocal about putting more cash into the business and expanding the company beyond its print roots.
The New York-based company, whose titles include People, Sports Illustrated and its namesake Time magazine, has been on a digital shopping spree in recent months.
In February, it acquired Viant Technology, a New York-based marketing firm that owns Myspace, an early social media company. Last fall, it bought HelloGiggles, a lifestyle website owned by actress Zooey Deschanel, and xoJane, an online magazine geared to women.
Yahoo faces increasing pressure from shareholders and investors to sell its core business instead of going through a spinoff that would separate the company from its stakes in Yahoo Japan and Alibaba Group.
Analysts see Verizon , the large telecommunications company that bought AOL last year for $4.4 billion, as being a more likely candidate to prevail in the auction for Yahoo's web business.
Time Inc's revenue annual revenue fell 5 percent to $3.1 billion last year, with print and advertising revenue falling 10 percent to $1.32 billion. However, its digital advertising revenues have been on the upswing and rose 11 percent to $221 million last year.