The war over who will be Internet King has another battle brewing, and it’s going to make technology-related exchange traded funds (ETFs) something to keep an eye on.

Yahoo (YHOO) has been slumping, and Microsoft (MSFT) has swooped in with an unsolicited takeover offer of $44.6 billion, reports Michael Liedtke for the Associated Press. It’s Microsoft’s boldest move so far to challenge Google (GOOG), which has so far been the leader in the online search engine and advertising markets. They control 60% of the U.S. search market and its lead is widening.

After the news came out, Yahoo’s shares shot up 49% in morning trading.

Yahoo, for its part, has said it will "carefully and promptly" study the offer. Its stock dropped to a four-year low earlier this week, and a new management team has been working hard to turn things around.

Naturally, with these three Internet titans in the mix, Internet and technology ETFs could have some interesting days ahead. So far this year, they’ve been having a rough go of it.

A few you may want to keep an eye on, especially those heavily weighted in Yahoo:

• Internet HOLDRs (HHH): Yahoo is 20.4%. Year-to-date it’s down 14.8%, but has gotten a boost from the announcement today.
• First Trust Dow Jones Internet Index (FDN): Yahoo is 9.9%; Google is 10%. Year-to-date it’s down 11.9%. It too has been positively affected by the possible takeover.
• Technology Select Sector SPDR (XLK): Microsoft is 10.8%; Google is 6.1%; Yahoo is 1.2%. Year-to-date it’s down 12.8%.
• iShares Dow Jones US Technology (IYW): Microsoft is 13%; Google is 7.1%; Yahoo is 1.3%. Year-to-date it’s down 12.9%.

Tags: Sector ETFs, Technology