Microsoft has offered $44.6 billion to buy Yahoo in a cash-and-stock deal. Here are highlights from the conference call Microsoft is holding to discuss it.
5:35 a.m. Pacific: Steve Ballmer calls offer "significant." He called Yahoo CEO Jerry Yang last night to discuss it. A year ago, Yahoo management it "wasn't the right time" to discuss an acquisition.
5:37 a.m.: Kevin Johnson, who heads up Microsoft's Windows business and led its acquisition of aQuantive and the investment in Facebook, is talking about online-advertising industry economics. He describes it as a "scale" business in the areas of search advertising and ad serving. "Requires significant investments" in technology and infrastructure" leading to "a period of consolidation." The market is "dominated by one player" — he's obviously talking about Google. In other words, the antitrust argument has already begun.

Microsoft just offered to buy Yahoo for $44.6 billion or $31 a share, half in stock and half in cash. (Microsoft has the cash on hand.) That's a 62 percent increase over yesterday's close. The offer came as a letter from Microsoft CEO Steve Ballmer to Yahoo's board. Here's a copy.

Microsoft's $44.6 billion offer to buy Yahoo has markets moving. Yahoo share prices closed at $19.12 yesterday, but have already increased to $29.45 in premarket trading. Microsoft shares have remained around $32. The morning brings more bad news for Google shareholders. After missing fourth quarter expectations, Google share prices dropped yesterday afternoon and even further on this morning's news, from closing price of $564.30 to $517. (Photo by epicharmus)

Microsoft said it has made a cash-and-stock offer to buy Yahoo for $31 a share, according to the Wall Street Journal. The deal would value the company at $44.6 billion. The deal also offers a 62 percent premium over Yahoo's share price at market close yesterday. "We have great respect for Yahoo, 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," Microsoft CEO Steve Ballmer said. "We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners."

What's the value of the spoken word? $300 million, according to Amazon.com, which just purchased the leading digital audiobook reseller, Audible.com. The amount is a premium of more than 20 percent on yesterday's closing price. The purchase of Audible, which just celebrated its 10th anniversary, shows that Amazon is serious about digital content. Amazon has sold Audible's audio downloads since May 2000, and the purchase is a natural fit as Amazon offers more content via digital delivery. But what does it mean for the consumer?

BEA has told its employees not to blog about the software maker's impending merger with Oracle. For the record, we stand with BEA management on this one. BEA employees, why go through the trouble of blogging when you can just send us tips and let us take care of it for you? [Docu-Drama]

Nokia is buying Trolltech, a small Norwegian mobile software company, for $153 million. The purchase is yet another in a series of acquisitions Nokia is making as it rolls out a new software and services strategy. Nokia purchased digital mapmaker Navteq for more than $8 billion last fall. [Reuters]

LX.TV—formerly Code.tv and occasional target of Gawker mockery—is all growed up. The proudly idiotic web video lifestyle porn purveyors have been acquired by the good people at NBC. Specifically NBC's "Local Media Division" which seems like sort of a sad ghetto for such an ambitious group but LX.TV has been enriching viewers of New York's WNBC for some time now with their terrifying original content. Meet a new worst person in the world every week! It's seriously hypnotic. Anyway, New York is dead and now you can watch drunk i-bankers party on its corpse live on channel 4. [NBC Universal]

Another Demo is coming up this January 28-30. Smart startup founders will save their best pitches not for the bored audience — trust us, they'll all be ignoring you and sending BlackBerry emails. Instead, buttonhole the guys with money to spend, starting with reps from Google, Microsoft and Cisco. Here's who they're sending.

Los Angeles-based Withoutabox, a membership site which allows independent filmmakers to submit their work to movie festivals, has been acquired by Amazon.com subsidiary IMDB, the company told customers in an email today. David Straus and Joe Neulight founded the company in 2000 and saw it become popular among film-school students and film-festival producers. A niche audience, to be sure: Compete.com puts the site's "people count" in December 2007 at 22,888. But we suspect that Amazon bought the site not for its eyeballs, but for content it can sell directly to its huge audience of shoppers, bypassing Hollywood. Straight from Withoutabox to Amazon Unbox, in other words. Anyone know how much Amazon paid?

Global Equities Research analyst Trip Chowdhry on Oracle's purchase of BEA Systems: "Contacts tell us that Oracle delayed giving yearly raises to its employees for a quarter to fund the acquisition, which indicates seriousness on Oracle's part to have the acquisition done." [Epicenter]

You likely haven't heard of Balderton Capital, Benchmark's former affiliate in Europe. But Barry Maloney, a partner at the VC firm, is crowing after the $1 billion sale of MySQL to Sun. Balderton owned a 15 percent stake in MySQL. It owns a similar share of Bebo, the social network which Rupert Murdoch reportedly paid a visit to recently. Bebo denies Murdoch's interest was related to an acquisition. But Bebo's U.K. market share is a coveted prize. Were Bebo to sell, so soon after MySQL's exit, Maloney would have even more reason to brag; he's on Bebo's board.

As we've chronicled, Oracle CEO Larry Ellison has conducted a war of words with BEA in his protracted takeover fight, threatening to pull his $17-a-share bid or make a lower offer. BEA's board also said it would accept nothing lower than $21 a share. In the end, BEA sold for $19.375 a share. The Wall Street Journal's explanation? "Don't believe anything anyone says in a takeover fight." That sounds about right.

Oracle has acquired BEA for $8.5 billion. Sun has acquired MySQL for $1 billion. These events are not coincidence. Oracle, which already makes a database, wants to add BEA's software on top of that database. Sun, which makes application servers and other software which connects to databases, wants to slip MySQL in underneath that layer. It all adds up to what geeks and software salesmen call a "stack," or a complete package of interconnecting programs.

Sun Microsystems will acquire open source database developer MySQL AB for approximately $1 billion, the companies announced this morning. Sun characterized the move as its entry into the $15 billion corporate-database market.

News Corp. chairman Rupert Murdoch recently paid a visit to social network Bebo, according to Bebo employee Emma Carlsgaard, who posted an update to her Bebo profile about the sighting. What's Rupe doing visiting Bebo? A recent rumor suggests acquisition talks.

Microsoft is buying Fast Search & Transfer, a Norwegian company, for $1.2 billion. Ostensibly, this is meant to bolster the search function within Microsoft's Office business. But I read it as an admission that Microsoft's multibillion-dollar annual R&D budget can't buy it a fighting chance against Google. Microsoft keeps spending more on "improving" its search technology, and yet consumers are indifferent; they continue to switch to Google in droves.

It's curious that rumors of a Plaxo sale exploded at the same time that Robert Scoble got his Facebook account suspended using a secret, unreleased tool for extracting data from Facebook. Curious, too, that Plaxo is so eager to milk the incident for good PR. While a battle of words takes place in public, we hear that quieter talks are happening behind the scenes: A sale of Plaxo to Facebook. A clash between the companies' backers, though — the powerful VC Michael Moritz and the rising VC star Peter Thiel — could sink any deal.

The New York Times reports that address-book service Plaxo is seeking up to $100 million from buyers. Reporter Andrew Ross Sorkin writes, "Plaxo, which has been overtaken by rivals like LinkedIn and Facebook, has tried to reinvent itself as an aggregate of information from other social networking sites," joining Google's OpenSocial initiative in November. That spiked usage among customers. Selling now may be not desperation, but timeliness.

Digg CEO Jay Adelson told BusinessWeek that the company is not planning a 2008 IPO, holding acquisition talks, or looking for more money. Which is obviously bullshit. That is, unless Digg hired Allen & Company, an investment bank which specializes in media deals, to bolster its ultimate frisbee team.