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

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 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.
“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,” Gates said.

Gates said that 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.

Microsoft has developed its own search-ad platform and bought aQuantive, an Internet advertising company, for $6 billion, but its US online operations are loss-making.

It has captured just 10 per cent of US Internet searches, compared to Google's 58 per cent and Yahoo's 22 per cent.

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.