Microsoft has no plans to make another approach for Yahoo after it pulled its $47.5 billion bid earlier this month, Microsoft's Chief Research and Strategy Officer Craig Mundie said on Thursday.
"The market may wish that the Yahoo deal may come back together, but Microsoft at least at this point assumes it's over," Mundie told Reuters in an interview in the Indonesian capital.
"We know what we thought it's economic limits were and that didn't come together, so we've moved on and we will go back and implement plan B that we've been on in any case," he added, referring to the company's online services strategy.
Microsoft walked away from its bid to buy Yahoo last Saturday after the Internet company turned down its offer to raise the price by $5 billion to $47.5 billion.
Microsoft's offer was for $33 a share but Yahoo would not lower its demand below $37, Microsoft Chief Executive Steve Ballmer said.
The software company initially bid $31 per share for Yahoo more than three months ago.
"Yahoo could always come back again and say please buy us for $33 (a share) and I'm sure we might reconsider it but we're not assuming that's going to happen," added Mundie, who took over as Microsoft's lead visionary on technology from co-founder Bill Gates in 2006.
Microsoft's online business has racked up nine straight quarterly losses, but Mundie said it was prepared to be patient.
"We view these online services as strategic long term businesses. We will continue to invest heavily in order to do that and our aggregate business performance allows that to happen," he said.
Mundie also said he felt the long-term position for the Seattle-based firm on sustaining improvements in the battle against piracy was intact, even if there were blips in the trend.
Microsoft said after releasing its March quarterly results in late April that emerging markets saw an increase in the number of PCs sold without licensed software -- often a sign that pirated software will later be installed on the machines.
"I don't think anything's fundamentally changed. Each of these countries has their ups and downs as a function of changes in government, you know individual regulators, law enforcement priorities etc," said Mundie, who was in Jakarta for a conference on government leaders in Asia.
Mundie cited China as an example of a country where the piracy rate was very high but the situation had improved after the top levels of government brought in regulatory changes.
"I'm personally optimistic about that. I don't see a reason for alarm," he added.
On strategy, Mundie said he had his own ideas about how the firm would evolve, but there were unlikely to be big operational changes when Gates departs at the end of June.
"I don't think Microsoft will be substantially different on July 1st then it is on June 30th."
Mundie said an area of big investment for Microsoft was parallel computing, which has been hyped for years as the next big thing in technology, allowing computers to run faster by dividing up tasks over multiple microprocessors.
"Through parallelism we should get a different slope in terms of the advancement curve in terms of the capability of these computers, but only if you can figure out how to program them," he said, adding that he expected to see a basic capability in this area in PCs in five years time.
He also highlighted "surface computing" as an area he expects "is going to be a big big deal" once costs were driven down.
The firm has developed a coffee-table-shaped "surface computer" where the mouse and keyboard are replaced by more natural interaction using voice, pen and touch.
He said the firm was initially targeting the hospitality and gaming industries, "but we make no bones about the fact that our dream is that every home will have a table that people use as a surface to play kids games on and finger paint on and other things."