Last month, many were valuing Yahoo’s web business at close to $8 billion. Now, according to a report by the Wall Street Journal, the auction of the troubled internet giant's core business is likely to fetch only around $2 billion to $3 billion.

The report, which cited people familiar with the matter, said the New York-based telecom company Verizon Communications is currently the front-runner in the bid to acquire Yahoo’s internet assets that have, in recent years, struggled to remain profitable.

According to an earlier report by Bloomberg, Verizon, if it acquires Yahoo, is likely to combine its online business with AOL, which it bought last year in a deal valued at roughly $4.4 billion.

RTXTG2T Yahoo Inc. offices, housing its Search Marketing Group, are pictured in Burbank, California, October 14, 2010. Photo: Reuters/Fred Prouser

Other bidders reportedly include the private equity firm TPG, and an investor group that includes Bain Capital, Vista Equity Partners and former Yahoo CEO Ross Levinsohn — many of whom are expected to bud in the low end of the $2 billion to $3 billion range. Billionaire investor Warren Buffett — the chairman of Berkshire Hathaway — is also rumored to be backing a bid by Quicken loans chairman Dan Gilbert. 

The deadline for submitting the bids expires in the first week of June. If the bids are lower than expected, Yahoo may even abandon the sale, the Journal reported.

Yahoo has, in recent years, struggled to remain profitable as it competes with Google and Facebook for digital market advertising share. Last month, the company reported an 18 percent drop in its first quarter revenue, which fell below $1 billion for the first time since Marissa Mayer took over as the CEO four years ago.

At the time, Mayer said that Yahoo had made “substantial progress” toward providing strategic alternatives to its shareholders. The company is also believed to be exploring the sale of $1 billion to $3 billion of its non-core assets, including its patents and property.

On Thursday, Yahoo's shares closed down 0.6 percent in New York. Over the past 12 months, the company's stock has dropped over 17 percent, underperforming the broader index.