Microsoft to buy Yahoo!
BBC News reported that Microsoft has offered to buy the search engine company Yahoo! for $44.6bn (£22.4bn) in cash and shares. The deal would pay Yahoo shareholders $31 a share, which represents a 62% premium from where Yahoo stock closed on Thursday. 
Yahoo confirmed that it has received an unsolicited offer and said that its board would evaluate the proposal, "carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."
According to its letter to Yahoo, Microsoft attempted to enter talks about a deal a year ago, but was rebuffed because Yahoo was confident about the "potential upside" presented by the reorganisation and operational activities that were being put in place at the time.
Microsoft said that Yahoo shareholders could choose to receive either cash or shares.
Yahoo shares have fallen 46% since reaching a year-high of $34.08 in October. They rose 54% in pre-market trading.
In a conference call, Microsoft's Kevin Johnson said that the combination of the two companies would create an entity that could better compete with Google.
"Ultimately this corporate marriage was forced by the rise of Google, which has grown into a serious competitor for both Microsoft as a software company and Yahoo as an internet portal," said Tim Weber, business editor of the BBC News website.
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