Microsoft GM to Yahoo: Good-bye to you

Microsoft has moved on from Yahoo and is focused on growing its Internet business organically for now

While Yahoo would have given Microsoft's Internet business an immediate boost, Microsoft has closed that chapter and is focused on moving forward, a Microsoft official said Tuesday.

"We have a lot of opportunity to keep growing organically. Certainly Yahoo would have been an accelerator, but we've withdrawn the offer, moved on and now we're focused on how to grow as fast as possible organically," said Brian Hall, general manager of the Windows Live Business Group, in response to a question at the Merrill Lynch Technology Conference.

Hall reiterated that position several times whenever he was asked about Yahoo. "In the case of the discussions with Yahoo, we put forth a very compelling offer; we felt it was the right valuation and a very fair valuation," he said. "Now we're focused on driving the business, building out our global expansion, driving search and a number of other things, and moving on from the Yahoo discussion."

Since Microsoft walked away from its acquisition bid on Saturday, many observers believe it now needs to explain in detail how it plans to accomplish all the goals it had been saying Yahoo would help it with.

Hall didn't provide that depth of insight on Tuesday.

He spent most of his presentation explaining Microsoft's strategies for online advertising and for melding its PC and server software with the Web. He also highlighted what he considers major accomplishments in those areas, such as quadrupling its search engine's index, announcing Live Mesh, upgrading Hotmail and completing the aQuantive acquisition.

He even reiterated the old Microsoft belief that search is in its infancy and that opportunities still exist in that market, even as Google continues to increase its domination of search usage and search advertising.

"We definitely can gain share in search. Obviously Google is in a very strong position, but we think there's a lot of opportunity there still," Hall said.

For example, a large percentage of queries aren't answered satisfactorily, and the typical search engine interface is due for improvement, he said.

"[Search] is new, it's highly computational, highly software-driven environment. We know that's something we can do exceedingly well," he said.

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Juan Carlos Perez

IDG News Service
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