Microsoft won't be pursuing tie-ups or takeovers to replace its failed Yahoo bid, Bill Gates said in Tokyo on Wednesday. Gates said "Microsoft had put a lot of effort into talking to Yahoo."

Referencing comments made by Steve Ballmer, Gates said that "now at this point, Microsoft is focused on its independent strategy."

Microsoft spent three months courting Yahoo but dropped its pursuit on Saturday after the two sides failed to reach agreement on a takeover price. Microsoft had initially offered US$31 per share and raised it to US$33 per share to try and entice Yahoo but the search engine operator held out for $37 per share.

After final negotiations late last week Ballmer signaled to Yahoo CEO Jerry Yang that it was throwing in the towel.

"We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo and the market as a whole. Our goal in pursuing a combination with Yahoo was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees," said Steve Ballmer in a statement distributed early Saturday evening.

Next day Yang, facing pressure from shareholders, signaled that Yahoo is still open to an offer from Microsoft or another company as long as the company is not "undervalued."

"We've always felt the Yahoo platform has been undervalued or underappreciated by the marketplace,' he told.

Gates was speaking in Tokyo and announced two programs from Microsoft Japan. One promotes Windows Media Center and the other will provide Microsoft's software development tools at no charge to student developers.