Gates: Microsoft shifts focus after Yahoo deal collapses

Microsoft has not presented an alternative strategy to compete with its dominant rival in the Internet business, Google Inc., since withdrawing a $47.5 billion bid for Yahoo Inc. last weekend.

Analysts have been left wondering how the world's largest software maker will get a larger piece of that multibillion dollar market without a major tie-up.

"We have always felt we could do very well on our own and now that's the path we are focused on," Gates said in an interview with The Associated Press in Jakarta on Friday.

"The standard strategy for us is to just hire great engineers and surprise people at how well we can compete, even with a company that's got a strong lead," he said.

Gates says Microsoft remained open to making acquisitions, but declined to comment on possible candidates, such as networking sites like Facebook in which Microsoft already holds a 1.6 percent stake.

"You never know if there's going to be a deal that makes sense," he said.

Microsoft has developed its own search-ad platform and bought aQuantive, an Internet advertising company, for $6 billion, but its U.S. online operations are losing money.

It has captured just 10 percent of U.S. Internet searches, compared to Google's 58 percent and Yahoo's 22 percent.

Gates also said that Bill and Melinda Gates Foundation has donated $3 million for emergency relief efforts in Myanmar and will provide software to help reunite family members separated in the cyclone.

The funds were transferred to the aid agencies Mercy Corps, World Vision and Care "so they can go in there and help as quickly as possible," he said.

Gates was in Indonesia to meet with government leaders, including President Susilo Bambang Yudhoyono, at a conference on development called The Government Leaders Forum.