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Verizon and Yahoo are set to announce an exclusive $5 billion deal

The terms are still unclear.

Marissa Mayer, CEO of Yahoo
Robert Galbraith | Reuters
Marissa Mayer, CEO of Yahoo

Verizon and Yahoo are set to announce that they are striking an acquisition deal, according to sources close to the situation. The news is expected by Monday, although it could come earlier or later.

But Yahoo told other bidders on Saturday—those interested in buying Yahoo have included private equity firm TPG and a group led by Quicken Loans' Dan Gilbert—that the telcom giant was the winner of the four-month process, said sources.

The transaction of about $5 billion still has to pass regulatory muster and also faces difficult integration issues. Also, the reception of the deal from Verizon shareholders will be an issue.

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As per usual, there is always a chance it will not work out and one of the other bidders — most likely Gilbert — might lob in another offer once the terms are revealed.

Those terms are still unclear, including whether Verizon's deal includes some or all of Yahoo's patent and real estate assets, which have some (though diminishing) value.

Verizon is set to report its quarterly results on Tuesday, and sources said the pair hope to be able to announce details of the deal before then, if possible.

In any case, the move is not a surprise, given Verizon has been public in its interest in buying Yahoo and it has always been the front-runner.

Recode and others reported Friday that the Yahoo board had settled on Verizon, but the other bidders had still not been officially informed. Verizon was considered the safest bid among those made and most attractive, especially after Verizon upped its initial bid substantially. In addition, said sources, the willingness of Verizon to accept some "hairy" issues at Yahoo — including a less-than-ideal search deal with Mozilla and also large stock compensation costs.

The deal, which has been shepherded by Verizon's EVP of Product Innovation and New Businesses Marni Walden and AOL head Tim Armstrong, will be a big leap for the company, which has been seeking to add to its ad tech and digital content offerings. Verizon bought AOL a year ago for $4.4 billion to start that process.

But that effort has been mixed so far. For example, its Go90 mobile video service, aimed at teens, has gotten a lot of criticism from investors. There are also worries about how well Verizon will fare going up against digital ad powerhouses like Facebook and Google.

Adding Yahoo's assets to its weaponry could help — its BrightRoll programmatic video ad service is considered a plus — but a lot of its display tools are aimed at solving yesterday's problems.

Verizon will also be getting a mass of media assets, some of which are still powerful, such as Yahoo Finance and Yahoo Sports, and others not so much. Under CEO Marissa Mayer , Yahoo spent large sums on content — such as its $1 billion acquisition of Tumblr and a deal to bring TV news star Katie Couric to the network — that have not paid off.

The same is true with Mayer's intense — and many say misguided — plunge into mobile search technology, in an effort to make an end run around Google. Very little of her massive investment there has seen the light of day, and it is not clear if Verizon will continue it.

Also no surprise: Mayer is not expected to stay on after the deal is wrapped up in the fall, said sources, and it is unclear how many of Yahoo's current execs will remain. Many have had their options accelerated, but someone has to keep the lights on until Verizon gets to fully claim its prize.

It seems likely that effort will be run by Armstrong, who had once tried to get Mayer to consider merging the companies. He was pretty much rebuffed by her, but the idea of an AOL-Yahoo merger has been around for a long time and almost happened a few of those times.

Here's me writing about possible mergers of the pair in 2006. Then in 2008! Also 2010! And 2011! By the way, when AOL was really powerful in the mid-1990s, Yahoo was also given an offer by then-exec Ted Leonsis, as I reported in my book on AOL from then. (Conclusion: I have been covering Yahoo and AOL for too long.)

Mayer and Armstrong were also top execs at Google in its early days and have tangled since over talent raids while at Yahoo and AOL. (Remember the Ned controversy? Me either, but I did seem to write about it a lot!)

Well, finally it looks like it's going to happen. And it will be really hard.

"This is going to be a very tough integration," said one source, who noted that Yahoo and Verizon have spent very little time on the specifics of how the companies will coordinate pretty much everything. "The unknowns are as big as the knowns."

Translation: It's Yahoo, Jake.

Actually, maybe not anymore — it's not clear if Verizon will keep the well-known brand. Whatever the case, the sale marks a definitive end to one of the internet's most iconic and pioneering companies as an independent entity.

I tried everyone for a comment and no one seems to be home today. I wonder what they're up to?

By Kara Swisher, Recode.net.

CNBC's parent NBCUniversal is an investor in Recode's parent Vox, and the companies have a content-sharing arrangement.