Yahoo expected to decide on a buyer this week, with Verizon among favourites

Five players remain in the race, but Verizon least likely to break up Yahoo

Search engine giant Yahoo is expected to announce its choice of purchaser this week after final bids were received on Monday.

Five bidders remain in the race, according to Bloomberg. They are Verizon Communications, a group led by Quicken Loans founder Dan Gilbert, AT&T and private equity companies Vector Capital Management and TPG, although it is not certain that AT&T and TPG have submitted final bids. Yahoo is expected to review the bids and to request best and final offers this week, according to Bloomberg's source. The final decision is expected to be announced before the end of the month.

While Vector Capital and Gilbert's group were understood to have made the highest offers in the second round of bidding, which took place in June, the competing parties are interested in different assets. Gilbert and Venture Capital are looking to acquire Yahoo's core internet business, intellectual property and real estate, whereas Verizon's bid did not include Yahoo's patents and real estate. Verizon was understood to have raised its initial bid of $3.5bn, however, after new offers closer to $5bn were put on the table from other suitors.

Verizon is likely to be Yahoo's preferred bidder as its business model is closest aligned to that of Yahoo itself. Other potential buyers are more likely to dismember the company to realise the value of its assets.

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.

Founded in 1994 Yahoo was one of the first true internet companies and the very model of a Silicon Valley startup, attracting billions in funding and advertising revenues. But over the past decade Yahoo has struggled to cope with competition from newer rivals such as Google, Facebook and Amazon, and CEO Marissa Meyer, who took the post in 2012, has failed to turn around the company's fortunes. Her tenure has been marked by job losses, disappointing financial figures and arguments with investors.

This quarter Yahoo did report some success however, with a 5.2 per cent rise in total quarterly revenue and total revenue rising to $1.31bn in the quarter ending June 30 from $1.24bn a year earlier.

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, which is not for sale.