“The market may wish that the Yahoo deal may come back together, but Microsoft at least at this point assumes it's over,” Mr Mundie said.

“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 strategy.

Battle against piracy

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.

“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 Mr Mundie, who took over as Microsoft’s lead visionary on technology from co-founder Bill Gates in 2006.

Mr 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.

Meanwhile, Rupert Murdoch’s News Corp has opted out of the current round of Internet consolidation for now, even as Yahoo Inc investors pine for a white knight after Microsoft Corp dropped its bid.

The media conglomerate is not in deal talks with Yahoo, Microsoft or Time Warner Inc’s AOL, top News Corp executives said on Wednesday, though they did not rule out approaches down the line. “We will always look at strategic options, but we feel very comfortable with our current positioning on the Web,” News Corp Chief Operating Officer Peter Chernin said on an earnings call. “We are not in discussions with Microsoft,” he said.