Yahoo hopes to conclude the auction by next month, according to one of the people. The Sunnyvale, California-based company started exploring a sale of the assets after coming under pressure from activist hedge fund Starboard Value.
A consortium led by Quicken Loans founder Dan Gilbert, and backed by Berkshire Hathaway Chairman Warren Buffett, will also make it through to the final round, the people added.
Some private equity firms that had made it through to the second round will not be invited to submit third-round bids, another of the people said.
The people familiar with the matter asked not to be identified because the bids were confidential.
Yahoo, Verizon and AT&T declined to comment. A Quicken Loans spokesperson did not immediately respond to a request for comment on behalf of Gilbert's consortium.
Not all offers involve exactly the same assets, with some bidders indicating they are not interested in some of the patents and real estate assets on offer, sources have previously said.
Verizon is primarily interested in Yahoo's advertising technology tools. It has been examining how the other assets up for sale, such as search, mail and messenger services, could be combined with the corresponding businesses of AOL, which it acquired last year for $4.4 billion, Reuters reported last month.
AT&T has been seeking to catch up with Verizon in advertising technology as it seeks to expand in mobile video offerings.
A sale of Yahoo's internet assets would leave the company just owning a 35.5 percent stake in Yahoo Japan, as well as a 15 percent stake in Chinese e-commerce company Alibaba, which accounts for most of its value.
In December, Yahoo scrapped plans to spin off its Alibaba stake, after investors fretted over whether that transaction could have been carried out on a tax-free basis.
(Disclosure: CNBC has a content-sharing partnership with Yahoo's finance site.)