Gates Promises Tough Battle With Google

On his first trip to Israel, Bill Gates promised Microsoft Corp. would make an aggressive push into the fast-growing market for Internet searches, taking aim at archrival Google Inc.

Gates also said Israel's vibrant high-tech sector will play an important role in the global marketplace and pledged to strengthen cooperation with the country. He offered $1.4 million for local startups and pledged to connect tens of thousands Israeli children to the Internet.

"It's no exaggeration to say that the kind of innovation going on in Israel is critical to the future of the technology business," Gates told reporters.

He acknowledged the intense competition with Google, which dominates the highly profitable market for Web searches. But Gates said Web-search technology still has room to improve.

"Internet search as it is today will be dramatically better in a few years, whether it's us or Google," he said. "We're both going to be making dramatic improvements there."

Despite heavy investments in search technology, Microsoft remains a distant third in the area. Google processed 45 percent of U.S search requests in September, outdistancing 23 percent for Yahoo Inc. and 12 percent for Microsoft's MSN, according to Nielsen/NetRatings.

Gates said Microsoft is quickly branching out beyond its core business of desktop software, saying the company is developing software for use in automobiles, videogames and cell phones.

He said Microsoft is looking for new ways to use its software, "particularly making it user-centric so you can move between these various devices quite easily," he said. "Our strategy has never changed. It's a dream about software and the empowerment that software can provide."