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Microsoft made a $44.6 billion bid Friday to acquire Yahoo in a deal designed to ratchet up the heat on search and Internet advertising leader Google.

Microsoft outlined its half-cash, half-stock $31 per share offer in a letter to Yahoo's board, which released a statement that said its board of directors would study the offer.

By midday trading Friday, Yahoo shares had rocketed $9.11, or 47.5 percent, to $28.29, while Microsoft was down $2.18, or 6.7 percent, to $30.42, and Google was down $41.43, or 7.3 percent, to $522.87.

Microsoft's offer represents a 62 percent premium over the $19.18 close of Yahoo common stock on Thursday.

In a conference call, Steve Ballmer, Microsoft chief executive officer, said that the company had been in talks to acquire Yahoo for 18 months and that the decision to make the unsolicited bid was one "I've thought long and hard about." In his open letter to the Yahoo board, he noted a February 2007 letter he received from Yahoo Chairman Terry Semel, saying the time was not right for an acquisition because new initiatives promised "potential upside." "A year has gone by," Mr. Ballmer said in his letter, "and the competitive situation has not improved."

Kevin Johnson, president of Microsoft's platforms and services divisions, hinted broadly at layoffs, saying the company plans to eliminate redundant operating expenditures and Christopher Liddell, Microsoft's chief financial officer, said the company expects to derive $1 billion in "synergies" from the deal.

News of the deal unleashed a torrent of comment in blogs and email postings.

On Meetup.com's Newtech mailing list, one poster said: "This could be huge. I just heard about it on the news…It would really change the landscape."

Microsoft said the deal, which is anticipated to break even or add to earnings within two years, is expected to close in the second half of 2008.

Microsoft executives and analysts were uncertain whether the offer would flush out a rival suitor for Sunnyvale, California-based Yahoo.

Brad Smith, senior vice president and general counsel, said that "any number of companies might have an interest," but that one company that certainly won't make a bid is Google, given the anti-trust implications of its roughly 79 percent market share.

Brent Williams, an analyst at The Benchmark Company, said that it is possible that a rival bidder could emerge from the media sector, though they would need a strong balance sheet to make a credible bid.

On Thursday, former Yahoo Chief Executive Terry Semel resigned as chairman, severing ties with the company after seven years. He had been replaced as chief executive in 2007 by company co-founder Jerry Yang.

Earlier this week, Yahoo said it would trim 1,000 jobs from its 14,300 person payroll in an effort to rein in expenses.

Mr. Williams said that Google, based in Mountain View, California, is likely to exploit the uncertainty surrounding Yahoo by raiding engineering talent and poaching advertising customers.

"Google and Yahoo headquarters are how many miles apart?" he asked. "It's on the order of three miles apart. It would not surprise me greatly if there were mobile homes parked outside of Yahoo headquarters staffed with happy Google recruiters."

At the same time, he said Google's sales force is likely to be working the phones to point out that any Microsoft-Yahoo combination will have to unify their Internet advertising strategy.

"The Google guys know how to play the game to take advantage of the uncertainty in terms of customers," Mr. Williams said. "Every Google guy will be on the phone to customers and say: How are you going to know which ad platform will work? How do you know which will win? They're going to position Google as the safe choice."