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In an interview with an Israeli newspaper, Microsoft chairman Bill Gates said that his company sees Google as a threat, but is by no means scared of the growing search giant.

Bill Gates, however, did agree with the assessment that Google is Microsoft's primary competitor. But he said company has plans that will take effect over the next six months, which it hopes will cut into the Google's dominance in the Web search market.

"We do not fear Google, but there is intense competition between us," Gates told the dailyYediot Ahronot. His comments came while making a brief visit to Israel, where he met with Prime Minister Ariel Sharon and praised the country's contributions to the technology world.

In the space of just a few years, Google (GOOG) has emerged as Microsoft's most formidable competitor in its leap to dominate the Internet search market. Google, it stock-market value now more than $99 billion, accounts for nearly half of all Internet searches conducted by U.S. users, easily surpassing both Microsoft and Yahoo Inc.'s (YHOO) share of the market, according to Nielsen// NetRatings data.

Gates said excellent people work at Google, based in Mountain View, Calif., but he said the state of Internet content search remains terrible compared to what the industry can achieve.

For its part, Microsoft, the world's largest software company, is planning to improve the technology in the next six months, Gates said, acknowledging that Google and other competitors also have the same goals.

He also said the company has no intention of trying to acquire Google or any another major player in the Internet-search category, the paper reported.

Microsoft is set to release its latest quarterly results on Thursday.

Microsoft's stock closed higher by 8 cents, or 0.3%, at $25.11. Shares have ranged in price from $23.82 to $30.20 over the past 52 weeks.