Microsoft has announced an unexpected 44.6-billion-dollar bid for Yahoo, as a latest move by the software giant to challenge Google's dominance of the lucrative online search and advertising markets.

According to a Microsoft statement, the combination of the two companies could realize 1 billion dollars a year in efficiencies and synergies while better positioning them to compete for online dollars.

Scott Kessler is a Standard and Poor's analyst.

If you think about this it's really all about one thing. It's about competition with Google and Microsoft and Yahoo frankly have had some difficulties in being successful in competing with Google. They've had some small victories in the last number of months, but ultimately I think Microsoft decided that the time was right to strike.

Yahoo says its directors will evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans.

Microsoft has been attempting to buy Yahoo in negotiations for the past year, with no success.