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In the wake of its unsuccessful takeover bid for Web pioneer Yahoo, Redmond, Washington-based Microsoft will focus on the pursuit of "independent paths," according to co-founder and chairman Bill Gates speaking in Tokyo Tuesday, as reports that the company's bankers spoke with social networking giant Facebook about a possible acquisition arose Wednesday. Gates told reporters at a news conference that Microsoft was not pursuing additional deals after withdrawing its offer to purchase Yahoo on Saturday. Bill Gates Says Microsoft To Pursue Independent Paths As Its Bankers Contact Facebook During final negotiations Microsoft had increased its initial $44.6 billion offer of February 1 to $47.5 billion, or $33 per share of Yahoo  stock, however Yahoo chief executive Jerry Yang and his management team held  strong to a demand to accept no less than $53 billion, or $37 a share, an amount greater than Microsoft chief executive Steve Ballmer and his team were willing to pay. Gates told reporters Tuesday that Microsoft put in "a lot of effort" to make the Yahoo deal work, and added, "Now at this point Microsoft is focused on its independent strategy." The comments marked a change in tone from those Gates made Monday in South Korea, where he said that the world's largest software firm had not ruled out partnerships following the failed bid for Yahoo. Recently Microsoft bankers have been in contact with Facebook in an attempt to determine whether the social networking company would be open to a sale to Microsoft, according to a Wednesday report in the Wall Street Journal, citing a person familiar with the contact first reported on Dow Jones and Co.'s AllThingsD.com Web site. The two firms have not held negotiations regarding a possible sale, the Journal noted, and added that the likelihood of Facebook agreeing to a Microsoft acquisition was unknown. Past indications from Facebook chief executive Mark Zuckerberg point to a likely refusal to sell the firm, however Microsoft already owns a 1.6 percent portion of the firm, worth $240 million, from a purchase made last year. That investment placed Facebook with a valuation of $15 billion, a large sum yet not nearly as much as Microsoft had offered to purchase Yahoo last week. Gates Sees Forthcoming Microsoft Search Advances Microsoft trails search leader Google in both an online advertising market that was worth $40 billion in 2007 and is predicted to double to $80 billion by 2010, and in overall Internet search market share. Despite the failure to acquire Yahoo, the second most popular search engine behind Google, Gates sees Microsoft making inroads in the search marketplace. "We will make the advances that give people a great choice there," said Gates, who added that Microsoft had planned meetings in Seattle to work on more detailed search upgrade plans. Gates said he envisions a future for Microsoft's search engine that will bare little resemblance to today's operations. "The whole environment will be very, very different," Gates said, adding that the company's marketing efforts would change as well. Speaking Tuesday with South Korean President Lee Myung-bak, Gates said that the next decade of Internet operations would also be "very different" from the Internet of the past. Besides Facebook, Microsoft could court other large Internet firms regarding possible partnerships, including News Corp.'s leading social networking Web site MySpace, business oriented networking service LinkedIn Corp., and Time Warner Inc.'s AOL division. AOL may also be facing interest from two directions, as it is taking part in talks with Yahoo about a possible merger. Related Links:
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9:16 pm on May 7, 2008 (utc 0)
