With the cash question settled, investors will be looking elsewhere on Microsoft's balance sheet for answers. With quarterly results due Thursday, investors can spend their time scrutinizing other aspects of Microsoft, namely its individual business segments and the company's balance of unearned revenue--money already taken in as part of long-term contracts.
In a research note Monday, Goldman Sachs analyst Rick Sherlund suggested that Microsoft may have better news on that front than expected.
The success of Microsoft's Windows operating system is inextricably tied to its strong developer division. Since its founding, Microsoft has supplied programmers with the tools to build applications for Windows, the company's crown jewels.
There's a close technical kinship between Windows and Microsoft's .Net development platform--particularly as the company continues to heap more and more software "plumbing," such as Web services connectivity software, into Windows. And developers are instrumental to getting advanced features such as better search capabilities into commercial applications.
Microsoft's decision to issue a special dividend to its stockholders will also make the world's wealthiest philanthropy about 10 percent richer. Bill and Melinda Gates yesterday announced that all of an estimated $3 billion of the stock dividend that would have gone to the Microsoft chairman will instead be donated to their non-profit foundation in support of its efforts in global health, education and equity.
"While our family foundation is making progress, there remain so many urgent needs and challenges that we must address together as a society," said Melinda Gates in a statement the Gateses released yesterday announcing their donation.
Microsoft said Tuesday that it will offer shareholders an increased dividend, buy back $30 billion of stock over the next four years and offer a one-time payout to shareholders of $3 per share.
Analysts have been calling on the company to distribute some of its $50 billion in cash for some time. The company initially urged patience, but had promised in recent months that it would offer a plan for the cash ahead of an analysts' meeting next week.
Lawyers for plaintiffs in the federal antitrust lawsuit against Microsoft raised few objections in a Monday hearing on the company's compliance with the court-approved settlement, but one lawyer questioned whether the settlement is having much of an effect on the software marketplace.
Microsoft lawyer Charles Rule argued the settlement has had an effect. In the past three months, three new companies have signed up for the Microsoft Communications Protocol Program (MCPP), a communications protocol licensing program that came out of the settlement, and choices in the media playback market place continue to expand, including Apple Computer Inc.'s iTunes service, Rule said.
Microsoft has expanded the Source Licensing Program under which its Most Valued Professionals get access to the source code for the Windows operating system. The Redmond, Wash., company said on Monday that all the MVPs within the Microsoft platforms community and living within the 27 eligible countries worldwide will now be able to access Windows source code at no cost.
The source code provided under the program covers Microsoft Windows 2000, Windows XP, Windows Server 2003 and future versions of Windows operating systems, including all released versions, service packs, betas and subsequent releases.
Microsoft will pay upstart Linux seller Lindows $20 million to settle a long-running trademark dispute, according to a regulatory document filed Monday.
In exchange for the payment, Lindows--which recently renamed most of its products "Linspire" to work around European trademark suits--will give up the Lindows name and assign related Web domains to Microsoft, according to the registration statement Lindows filed with the Securities and Exchange Commission.
Microsoft has created a new business unit dedicated to strengthening its relationships with the media and entertainment industry, the company said Monday. The software maker said it hopes the unit, which it calls the Media/Entertainment & Technology Convergence Group, will help it tap new opportunities created by the cross-fertilization of personal computers with other electronic devices. Microsoft said the unit will consolidate the all company's efforts around home entertainment technologies, specifically in regards to its work on creating new media policies and industry standards.
InfoWorld
Microsoft and services company Capgemini SA have bolstered their seven-year alliance with a $50 million investment designed to sell more software and services to customers in several industries, the companies plan to announce Monday.
The money is being used to create product and services bundles based on Microsoft's Windows Server System products, the .Net platform and Capgemini's services. The bundles, some of which are already available, are aimed at organizations in health care, energy, chemicals, utilities, automotive, manufacturing, retail and the public sector, Microsoft and Capgemini said.
In a court filing late last week, Microsoft noted that the two companies have not signed off on a contract, nor has Sun made a necessary royalty payment. Sun agreed to take part in the Microsoft program as part of a wide-ranging deal earlier this year in which Microsoft agreed to pay Sun $1.95 billion to settle antitrust and other disputes.
A Microsoft representative said on Friday that the deal has yet to be signed but said "we expect to finalize it shortly." A Sun representative said he was looking into the matter.