Microsoft says has all it needs for ad business

Microsoft said on Wednesday it does not need to buy Yahoo to gain scale in online advertising, because it has "all the pieces" it needs to build a successful ad business.

Speaking at the Goldman Sachs Internet Conference in Las Vegas, Microsoft Chief Advertising Strategist Yusuf Mehdi said the world's largest software maker is already bigger than Yahoo in terms of users of its Web services like e-mail and instant messaging.

Last week, Microsoft said it would acquire Aquantive for $6 billion to gain a foothold in the online advertising business dominated by its rivals Google and Yahoo.

Still, some Wall Street analysts said Microsoft needed to buy an established Internet player such as Yahoo to gain scale to take on Google.

When asked by Goldman Sachs analyst Anthony Noto whether there would be assets from Yahoo that could help Microsoft, Mehdi said, "From where we are today, I think we have all the pieces."

Several newspapers reported this month that Microsoft was considering a deal worth an estimated $40 billion to $50 billion to acquire Yahoo. A source close to the situation subsequently said at the time that any talks had cooled.