AT&T seeking to outbid Verizon for Yahoo's internet business, report

Interest in Yahoo is hotting up

Telecoms giant AT&T has put in a higher offer for Yahoo's internet business in second-round bidding than rival Verizon, according to Reuters.

Quoting "people familiar with the matter", Reuters says that Yahoo is in the process of creating a new shortlist of bidders.

On Monday, it was reported that Verizon had made a second-round offer in the region of $3bn for Yahoo, placing it into competition with private equity firm TPG.

However, it is understood that a new offer of around $5bn has now been put on the table by an unknown bidder, Reuters said.

In April, Yahoo's core internet assets were valued at between $4bn and $8bn with the Verizon bid, which later reports put at £3.5bn, falling below this range.

Verizon has been building up its online advertising portfolio, last year acquiring AOL for $4.4bn, and with it that company's mobile video and online advertising technology. Verizon is integrating this into its smartphone and internet advertising offerings and its cable TV business. Its interest in Yahoo presumably lies with the billion regular visitors that the internet giant attracts to its various websites.

Meanwhile, AT&T has a stake in digital advertising company YP Holdings and is looking to increase its presence in the online advertising arena.

Yahoo is valued at £35bn in total, the vast majority of which is down to its holdings in Chinese internet firm Alibaba and Yahoo Japan. In February, the internet firm announced a 15 per cent cut to its workforce after reporting a $4.4bn loss for 2015, while in April it reported a quarterly loss of $99m.

Yahoo is also planning to auction off 3,000 patents dating back to 1996, with a mid-June deadline for preliminary bids.