Microsoft Corp. has pounced on slumping Internet icon Yahoo Inc. with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to challenge Google Inc.’s dominance of the lucrative online search and advertising markets, the Associated Press reports.

The surprise offer of $31 per share, made late Thursday and announced today, comes with Sunnyvale, Calif.-based Yahoo in a vulnerable position.

In a statement today, Yahoo said it will “carefully and promptly” study Microsoft’s bid.

With its profits steadily sliding, Yahoo’s stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.

The announcement sent Yahoo’s share price up 60% in premarket trading, while Google fell 8%, weighted down by a fourth-quarter earnings report that missed Wall Street expectations.

In a letter to Yahoo’s board of directors, Microsoft Chief Executive Steve Ballmer indicated that the world’s largest software maker is determined to bring the two companies together.

To underscore its resolve, Microsoft is offering a 62% premium to Yahoo’s closing stock price Thursday.

Since reaching a 52-week high of $34.08 in October, Yahoo shares have fallen 46%. In morning trading, Yahoo shares rose $9.09, or 47%, to $28.27. Microsoft fell $1.65 to $30.95, a 5% decline. And Google shares were off $47.32 to $516.98, an 8% decline.