Microsoft bids $44.6bn for Yahoo!

Microsoft has tabled a $44.6bn bid for web giant Yahoo!.

The bid values Yahoo! at $31 per share, 62 per cent more than the latest common stock value of the company.

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Microsoft CEO Steve Ballmer said a tie-up will allow the two to offer an "increasingly exciting set of solutions for consumers, publishers and advertisers" and allow them to be "better positioned to compete in the online market".

Ray Ozzie, chief software architect at Microsoft, said the deal will mean customers could have "new experiences" which the two companies could not produce on their own.

According to Microsoft, the online advertising market is expected to double from 2007 to 2010, hitting $80bn in revenue, meaning the benefits of scale will become increasingly important.

In a statement, Yahoo! confirmed it has received an "unsolicited proposal from Microsoft to acquire the company" and its board of directors will "evaluate this proposal carefully in the context of Yahoo!'s strategic plans".

Click here for Steve Ballmer's letter to Yahoo!...