Challenging Google’s global dominance of the online web search and advertising markets, Microsoft made headlines this week with an unsolicited $44.6 billion bid for Yahoo that would combine the world’s premier software firm with the Internet’s most visited web site. Although the Windows operating system and Explorer web browser developed by Microsoft are run on most of the world’s computers, Microsoft has struggled to find a niche in the rapidly-growing market for online search, advertising, and other services. Much of Google’s success is attributable to its presentation of side-by-side ads that correspond to search results and are therefore tailored for every user of its search engine. Sources indicate that Google currently provides ad space for 62% of the world’s search market. Yahoo, Google’s closest competitor, provides ad space for 13% of the global search market while Microsoft (MSN) comes in a distant third with 3%. As Microsoft executives predicted that the worldwide online advertising market, valued at $40 billion last year, would double by 2010, Microsoft unveiled a cash-and-stock offer for Yahoo, valued at $31 per share, that would give Microsoft access to Yahoo’s 137 million visitors per month and that would also give the software giant a potentially significant share of the lucrative worldwide market for online advertising. According to analysts, the proposed combination would account for up to 24% of the global search advertising market and 30% of the online display market. Sources at Yahoo declined comment on the offer, which is said to represent a premium of 62% over the company’s closing stock price last Friday. If accepted by the Yahoo board, the transaction is likely to face tough review at the Justice Department and on Capitol Hill, where Senate Judiciary Committee Chairman Herb Kohl (D-WI) observed: “we will need to scrutinize the deal carefully to ensure that it will not cause harm to the competitiveness of what has been a vibrant high-tech marketplace.” Pointing to Google in his assertion that “the market is increasingly dominated by one player,” Kevin Johnson, the executive in charge of Microsoft’s online operations, proclaimed: “the industry will be better served by having a more credible alternative in search and advertising.”