Yahoo referred to the bid as "unsolicited", but vowed to give it careful consideration.
Analysts have already suggested that the deal could be a major boost and a major headache for Microsoft.
In a statement released on Friday, Yahoo said that the board plans to " evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximise long-term value for shareholders".
The company issued the statement in response to the letter sent by Microsoft chief executive Steve Ballmer to Yahoo's board of directors on 31 January.
The letter proposed that Microsoft pay $31 per share in a deal which would total $44.6bn and create a formidable challenge to Google.
The Yahoo board that considers the proposal will not include former chief executive Terry Semel. The company revealed on 30 January that Semel would be resigning from his position.
Yahoo maintains that the move was not related to the Microsoft offer, pointing out that Semel told the company in June 2007 that he would step down as soon as a replacement could be found.
"With the company moving forward under new leadership, I believe this is an appropriate time for me to step down from the board," said Semel.
Board member Roy Bostock will take over as chairman.
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