Jon Swartz

USA TODAY

SAN FRANCISCO — Billionaire investor Warren Buffett is throwing his considerable clout behind a consortium bidding for Yahoo's Internet assets that includes Dan Gilbert, Quicken Loans' founder and owner of the NBA's Cleveland Cavaliers, a person familiar with the situation told USA TODAY.

The news was first reported by Reuters, which cited unnamed persons familiar with the situation, and sent Yahoo (YHOO) shares up 1.4% to $37 per share in after-hours trading. Berkshire Hathaway's B class shares (BRKB) fell 1% to $141.50.

The group is one of several vying for properties of Yahoo, the struggling Internet icon led by CEO Marissa Mayer, the person said on the condition of anonymity because the details of the bid are confidential. Verizon is considered the front-runner in the auction process, now in its second round.

Buffett, chairman of Berkshire Hathaway, had no comment when reached by phone by Reuters.

A representative for Yahoo declined to comment. Representatives for Berkshire Hathaway and Rock Ventures LLC, the Detroit-based investment and real estate firm chaired by Gilbert, did not respond to requests for comment.

"Clearly it gives whatever offer he might be participating in or contributing to a greater level of gravitas," said Scott Kessler, an analyst with S&P Global Market Intelligence, who said he had no knowledge of Berkshire's involvement beyond what Reuters reported.

Shakeout in the Yahoo bid process narrows players

Yahoo's fading fortunes, and growing unrest over the turnaround plan of Mayer, led to the auction after mounting pressure from activist shareholders, including hedge fund investor Starboard Value. Despite an online audience of up to 1 billion, Yahoo faces withering competition from Google, Facebook and others for digital advertising.

The involvement of Buffett, called the Oracle of Omaha for his lengthy tenure an investor with enviable returns, was considered unusual. His philosophy has hewn toward investing in companies with strong competitive strengths, or economic "moats," though he also takes a very long term view of his assets.

Josh Brown, CEO of Ritholtz Wealth Management, tweeted that it was "rare to see Buffett pursue a company with management he can't leave in place."

"As a finance partner, I could see it. can't believe it as equity owner," tweeted Brown.

One of Buffett's most well-known tech investments — IBM — has faired poorly in the past year, one of a so-called "dirty dozen" Berkshire stocks that had lost a combined $13 billion in the 12 months ended in February.

Buffett has, however, has shown an ability to identify value and help companies perform in creative ways, and has tended toward investments in well-known consumer brands included Coca-Cola, Wells Fargo & Co. and American Express.

"Maybe he thinks of Yahoo in that camp, if Yahoo were a private company it would be easier to hit the reset button and create some value," Kessler said.

Buffett has shown interest in more traditional media assets written off in a world of digital and mobile offerings and an ability "to seize upon value and been creative in ways that have essentially provided good returns with reduced levels of risk," he said.

A key player from Yahoo's past has a strong connection to Buffett. Former Yahoo president Sue Decker sits on the Berkshire Hathaway board. That makes it "very logical that Buffett's got some deep knowledge of whether or not there's some 'there' there (at Yahoo)," said Dave McIninch, chief revenue officer of Montreal-based search marketing company Acquisio, which works with Yahoo and is following the bidding process.

"So much has been made about the true value of the component parts of Yahoo relative to its overall valuation that any value investor like Buffett is going to for sure be interested in having a look," he said.

Contributing: Laura Mandaro and Jessica Guynn in San Francisco and Brent Snavely of the Detroit Free Press in Detroit and Mike Snider in McLean, Va.

Follow USA TODAY San Francisco Bureau Chief Jon Swartz @jswartz on Twitter.