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For the first time ever, Microsoft may be taking on some debt, as their offer of $44.6 billion of cash & stock for Yahoo sinks in with industry observers.

It's a lot of money, even for the company that minted Bill Gates as one of the richest people in the world, and Paul Allen and Steve Ballmer as billionaires. Is it too much?

Recently, the bearish outlook of the Motley Fool suggested Microsoft's best money-making days had passed. They cited the online division operating at a loss, the billion-dollar Red Ring of Death fiasco with the Xbox 360, and slow Vista adoption as reasons to think the worst of Microsoft.

"All you really need to ask yourself is why you're invested in Microsoft in the first place. Is it because the company's dominance happens to be in the high-margin software space? That palatial estate is toast, my friend," wrote Rick Aristotle Munarriz.

He may have spoke too soon. Analyst John Byrne at Technology Business Research Inc. had this to say about Microsoft, cash, and the Yahoo deal:

Microsoft has just over $21 billion in cash and short-term liquidity, including about $19 billion that is effectively at its disposal to apply toward a Yahoo purchase. Assuming the terms remain as proposed ($44.6 billion, 50%/50% split between cash and stock) that would imply Microsoft would need $22.3 billion in cash. To the extent that the eventual price goes above the proposed amount, the amount of cash required would probably go up.

However, I would expect that the regulatory process would be lengthy and that an actual consummation would not happen until near the end of the year. Considering Microsoft generated $14 billion in net income last year, I think they would probably be in a position to have built up sufficient cash on hand by then. They would always have the option to issue commercial paper to fund short-term borrowing needs if they wanted to go that route, but they probably wouldn’t need to.

Over at paidContent, Joseph Weisenthal has collected some other analyst commentary. Imran Khan of JP Morgan thinks Yahoo should take the deal and its generous premium, and thinks regulators will approve it without difficulty.

Jeff Pulver said it's never a good idea to underestimate the Redmondians. "Microsoft seems to be one of the companies that when others have written it off, it just bounces back and has always been able to re-invent itself," he said.