SEATTLE, May 8 — Bill Gates, Microsoft’s chairman, spoke to hundreds of marketers and advertising agencies here on Tuesday amid rumblings about his company’s struggle to compete against Google in online advertising and about its efforts to court Yahoo for some sort of partnership.
But Mr. Gates skirted those issues entirely and focused on what Microsoft has done best over the years: software. He demonstrated new technology that brings interactivity to online video and the ability to preview search results, which he said would open new doors for advertisers.
Still, talk persisted about deals, real or rumored, heightened by the planned appearance of Yahoo’s chief executive, Terry S. Semel, at the close of the two-day event on Wednesday.
Last Friday, reports that Microsoft might buy Yahoo sent Yahoo’s shares soaring. But people close to the companies said that no merger talks were active, and that the two were only discussing potential business partnerships.
Microsoft executives played down the prospects of any major announcements at the conference here.
Both Yahoo and Microsoft have struggled recently as Google has grabbed an increasing portion of the online advertising market. Google’s gains in search advertising have come at the expense of Microsoft, in particular. Many analysts, meanwhile, contend that Google is poised to extend its dominance from text-based ads into graphical advertising through its planned $3.1 billion acquisition of DoubleClick, the advertising services company.
Microsoft and Yahoo were also interested in acquiring DoubleClick, and Microsoft has asked federal regulators to scrutinize the deal.
In the face of Google’s growing power, some advertisers suggest they would like to see stronger competitors to the search giant.
some participants took the speculation about a Microsoft-Yahoo merger in stride. Sean Finnegan, managing director for digital at OMD, a global advertising agency, said the same rumors had surfaced around this time last year.
“It was almost perceived as an April Fool’s, where everyone had heard this before,” he said about last week’s rumors. “It was certainly interesting. At the same time, I am not sure the two need one another to compete with Google.”