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Following the withdrawal of its Yahoo bid, Bill Gates says Microsoft will focus on growing its online ad and search businesses.

The Associated Press reports Gates express confidence about Microsoft's ability to compete against Google, which, he admits, has a "strong lead" in search and advertising.

Microsoft is now rumored to be pursuing Facebook. And while Gates did not rule out future acquisitions, he did not comment specifically on the Facebook talk.

Microsoft right currently third in the search market. It serves just 9.4 percent of users, compared to Google's 59.8 percent and Yahoo's 21.3.

Google's Sergey Brin was reportedly happy that Google played the role of spoiler in Microsoft's futile pursuit. For a short while, Google emerged as a Yahoo liaison for search ad sales. Forward movement on that front has allegedly waned since Microsoft's shadow passed the search site over.

Brin said Google's relationship with Yahoo remains friendly.