Rumors turned out to be true, Microsoft this morning made a bid to acquire Yahoo for a record-setting $44.6 billion in a deal that, if completed, could significantly boost Microsoft’s presence in the search engine market and shake up the competitive and lucrative market for online advertising – two areas where both Microsoft and Yahoo have failed to mount a real challenge to Google.

A deal with Microsoft would also be a great outcome for Yahoo shareholders, who have grown increasingly frustrated with Yahoo's stock performance. The offer represents a 62 percent premium above yesterday’s closing price of Yahoo common stock and would allow shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock.