Verizon is expected to place a bid for Yahoo next week, while Google is also considering making an offer, according to a report by Bloomberg.

The report said that Verizon would be willing to make an offer for Yahoo's core internet business and its stake in Yahoo Japan. Verizon values Yahoo's core business at less than $8 billion, it said.

Verizon plans to replace Yahoo CEO Marissa Mayer with AOL CEO Tim Armstrong and Verizon's executive VP, Marni Walden, who would run the combined entity, the report said.

Aside from Google, Time and private-equity funds Bain and TPG remain interested in making a bid, according to the report.

Microsoft, AT&T, and Comcast are dropping out of the bid, although there's a small chance that Microsoft could provide a "token investment" to the winning bidder, it said.

Softbank, the majority owner of Yahoo Japan, is also not showing much interest in Yahoo's core business, it said.

Yahoo shares initially popped 1.6% on the news, but quickly reversed course and the stock was down roughly 1%. Yahoo set the deadline to place bids for its core business on April 11, according to previous reports.

The company is struggling after a three-year turnaround effort led by Mayer failed to gain much traction. Recently, the company put its core internet business up for sale, following pressure from activist investors to make "significant changes" to the company. According to a Re/code report, Yahoo's telling potential buyers that it expects to see its revenue drop another 15% this year.

It was not clear from the report exactly why Alphabet subsidiary Google, led by Sundar Pichai, is interested in Yahoo. Any acquisition by Google, which operates the world's dominant search engine and some of the most popular web properties, would be likely to raise regulatory scrutiny.

Yahoo's representative declined to comment on this report.