After much speculation last year, Microsoft has officially made a bid for Yahoo, the increasingly beleaguered web giant. Reuters reports that Microsoft has offered to pay $44.6 billion (£22.4 billion) to seal the deal.

Microsoft has been repeatedly linked with Yahoo and is offering to buy its search rival for $31 per share, a price that's 62 per cent above Yahoo's NASDAQ share price at the close of trading on Thursday.

"We have great respect for Yahoo," said Microsoft chief executive Steve Ballmer, "and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market".

If the deal goes through it should reignite the online war against Google, as Microsoft seeks to get more involved in web-based services. The search giant paid $3.1 billion (£1.56 billion) for online advertising company DoubleClick last year - the latest in a long line of huge deals.