Bill Gates, the chairman of Microsoft, said today that the software giant was not pursuing any further deals following the collapse of its $47.5 billion bid for Yahoo!, the struggling internet portal.

Mr Gates told a conference in Tokyo that Microsoft had put "a lot of effort" into its negotiations with Yahoo!, and had now decided that the two companies should pursue "independent paths" after they failed to agree a deal.

Steve Ballmer, Microsoft's chief executive, withdrew the company's $33-a-share offer for Yahoo! at the weekend. Jerry Yang, Yahoo!'s chief executive, is understood to have refused to consider any offer that valued Yahoo! at less than $37 a share.

Mr Gates told reporters at a news conference: "Now at this point, Microsoft is focused on its independent strategy."

Microsoft had originally offered $44.6 billion for Yahoo!, in a deal that valued the company at $31 a share, and Mr Ballmer later raised the offer to $33 after Yahoo! refused to yield.

Since the bid was withdrawn, Yahoo! shares have fallen by more than 20 per cent amid fears the company would be unable to find another deal or rescue its fortunes on its own. Yesterday they recovered to close at $25.72 - 11 per cent below Friday's high of $29.

Talks about a possible merger between Yahoo! and AOL, the internet unit of Time Warner are understood to be continuing, as are discussions between Yahoo! and News Corporation, parent company of Times Online. Microsoft, meanwhile, is also understood to be interested in buying AOL.

Yahoo! shareholders expressed anger yesterday at what they saw as the company's reluctance to accept a lower price, and questioned suggestions by Yahoo!'s board that many of the company' stock holders had supported its decision.

"“I would love to know who these shareholders are,” Gordon Crawford, a portfolio manager at Capital Research Global Investors, which owns 6 percent of Yahoo, was quoted as saying. “It’s none of the ones that I talked to today. Everybody I talked to would have sold their stock at $34,"

Mr Yang said earlier this week that he was open all along to selling Yahoo! to Microsoft, but that he felt that his company "either stand alone or with Microsoft" was worth "more than they put on the table."

Yahoo! has said it will hold its annual general meeting, at which it will re-elect its board, on July 3. One option reportedly being considered by Microsoft was to submit a proxy slate of directors for election to the Yahoo! board.

Under Yahoo!'s bylaws, any stockholder wishing to nominate people for election to the Yahoo! board must give notice of their intention by May 15.

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