Verizon might be the one to buy Yahoo’s core business

Verizon Communications Inc is the front-runner among the bidders to buy Yahoo Inc.’s core business, reports Reuters. The deal is expected to boost Verizon's AOL Internet business, by giving it access to Yahoo's advertising technology tools, as well other assets such as search, mail, messenger and real estate. These synergies have made Verizon the favorite among industry analysts to prevail in the auction.

Citing sources, Reuters says that Yahoo views Verizon as the buyer that can deliver the most value, but negotiations between the two companies are continuing, and no agreement has yet been reached. Also, Yahoo would like to have a deal for the core assets by the end of July.

The buy-out would also mark the end of Yahoo as an operating company, leaving it only as the owner of a 35.5 percent stake in Yahoo Japan, as well as its 15 percent interest in Chinese e-commerce company Alibaba Group Holding Ltd.

According to Erik Gordon, a professor at the University of Michigan's Ross School of Business, "Verizon has always been the favorite because it has the largest potential synergies and therefore can pay the most. The price negotiations still can be tough because it also doesn't need Yahoo. It can put its money into its AOL franchise."

Besides Verizon, AT&T a consortium led by Quicken Loans founder Dan Gilbert and backed by billionaire Warren Buffett; private equity firm TPG Capital LP; and a consortium of buyout firms Vector Capital and Sycamore Partners are also bidding for Yahoo assets.

Tim Armstrong, AOL, CEO, who made his name leading sales at Alphabet Inc's Google, is highly regarded in the advertising community. Experts believe it is unlikely that Yahoo CEO Marissa Mayer, another former Google high-flyer who has struggled to turn her Internet company around, would join him at AOL.