Microsoft announced this morning that it has official made an acquisition offer to Yahoo for the sum of $44.6 billion. Steve Ballmer on behalf of the Microsoft board of directors sent out a letter to Yahoo yesterday with the offer at $31 per share for all of Yahoo’s outstanding common stock.

According to the letter Microsoft has been in talks with Yahoo for some time, citing a letter in February of 2007 from Yahoo stating that “now is not the right time…”. Microsoft points out that things have not improved for Yahoo since earlier last year and without naming any other companies they refer to an increasingly dominate player in the market (we’re just guessing Google) who is increasing its own dominance by more acquisitions. Microsoft feels that combining forces with Yahoo increases the fighting chances in the online advertising space for both of them.

Ballmer listed out four main points in the advantages of the acquisition including scale economics, improved capacity for R&D, improved efficiencies in eliminating overlapping infrastructures and better focus on emerging online experiences in video, mobile and social platforms. It’s now up to Yahoo to decide if it’s now the right time. Interestingly, former Yahoo chief executive Terry Semel has decided to step down from his position on Yahoo’s board, only hours before news of Microsoft’s offer to Yahoo was announced.

Yahoo has since announced that it has received the “unsolicited” proposal and will give it a serious evaluation. Check out the full release and letter from Steve Ballmer and Microsoft on Microsoft’s News site.