Gates: Microsoft to go its own way

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 increase its share 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 loss-making.

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

"We are in software very broadly, but that advertising piece, we think, is a very exciting area," he said.