The auction for Yahoo's core business is expected to draw bids of around $2 billion-$3 billion, well below previous expectations for $4 billion-$8 billion, the Wall Street Journal reported Thursday, citing people familiar with the matter.
Verizon Communications is considered the lead candidate in a group of bidders that includes private-equity buyers TPG and a consortium among Bain Capital, Vista Equity Partners and former Yahoo CEO Ross Levinsohn, the WSJ said, citing people familiar with the matter.
Earlier this week, Berkshire Hathaway Chairman and CEO Warren Buffett confirmed to CNBC that the company had offered to be a finance partner to a bid by Dan Gilbert, the billionaire chairman of Quicken Loans, to buy Yahoo.
Yahoo, once the world's largest consumer email service, has struggled in recent years to compete with Alphabet's Google and Facebook for digital advertising market share.
In February, Yahoo CEO Marissa Mayer announced the company would auction off its internet business and cut 15 percent of its workforce. The company is also selling $1 billion to $3 billion in noncore assets, such as patents and property.
Last month, Yahoo reported slightly better-than-expected first-quarter earnings, with earnings per share (EPS) of 8 cents on gross revenue of $1.09 billion, down from EPS of 15 cents and gross revenue of $1.23 billion in the year-earlier period.
Those results were slightly less bad than Wall Street had estimated: Analysts expected Yahoo to report earnings of about 7 cents per share on about $1.08 billion in revenue, according to a consensus estimate from Thomson Reuters.
—Becky Quick , Matthew Belvedere and Everett Rosenfeld contributed to this article.