Gates outlines Web search investment plans

Microsoft plans to invest heavily in Web search to compete against Google, even if it fails to acquire Yahoo, the company's Chairman Bill Gates said.

Gates said Google is the only company with "critical mass" in Web search. Microsoft needs a bigger piece of the market to create a more competitive and profitable Web search business.

"We can afford to make big investments in the engineering and marketing that needs to get done. We will do that with or without Yahoo," said Gates.

"But we also see that we'd get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort," said Gates, who is Microsoft's biggest shareholder.

The two companies are at a stand-off in Microsoft's $41.7 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo's board rejected, saying it undervalued the company.

Microsoft countered by saying its offer was "full and fair", but did not say what it planned to do next. Analysts expect Microsoft to sweeten its bid, possibly to $35 a share, to clinch a deal.

"There is nothing new in terms of the process. We've sent our letter and we've reinforced that we consider that it's a very fair offer," said Gates, who remains the public face of Microsoft, even though he plans to switch to a part-time role at the company in June to focus on his philanthropic work.

Agencies

(China Daily 02/20/2008 page16)