Bill Gates: Microsoft (MSFT) Doesn't Needs Yahoo! (YHOO)

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Bill Gates says Microsoft (NASDAQ:MSFT) can do well in the search market if its offer for Yahoo! (NASDAQ:YHOO) does not work out. "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 in an interview with Reuters. The implication is that Redmond has so much prowess that it can build out its presence in search without any help.

In reality, Gates is whistling past the graveyard. His company has about 11% of the search market in the US and less worldwide. Google’s (NASDAQ: GOOG) lead in search is huge and its also upgrades its technology all the time. Microsoft can’t come from behind. Without Yahoo!, the race is lost.

Someone on the Microsoft M&A team probably asked Gates to make the statement. If Yahoo! seems less important there is no reason for Microsoft to raise the pricing of its offer.

But, Gates is just playing games.

Douglas A. McIntyre