Microsoft Corporation will focus on growing its own advertising and Internet search business after it withdrew its takeover offer for Yahoo, chairman Bill Gates said yesterday.

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

“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 per cent stake. “You never know if there’s going to be a deal that makes sense,” he said.

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