Microsoft has made a $44.6-billion offer to buy struggling search engine giant Yahoo. The merger would help both companies compete against rival Google in the hotly contested on-line advertising market. The $31-a-share offer is a 62% premium on Yahoo's share price as of last night. Earlier this week Yahoo cut 1,000 jobs, its biggest since the dot-com crash.
Microsoft said in announcing the offer that the online advertising market is "increasingly dominated by one player. Together, Microsoft and Yahoo can offer competitive choice while better fulfilling the needs of customers and partners." If the bid is accepted it will be one of the biggest takeovers in corporate history and by far the biggest in the technology sector. Yahoo shares jumped to $29.45 in premarket trading, the Wall Street Journal reports; Microsoft dipped from $32.60 to $32.