By Peter Galli  |  Posted 2004-07-20 Print this article Print

&D Wont Suffer"> But Bill Gates, Microsofts chairman and chief software architect, also stressed that the payout would not affect Microsofts commitment to research and development to fuel growth in the years ahead. "We see incredible potential for our innovation to help businesses, individuals and governments around the world accomplish their goals, and we will continue to be one of the top innovators in our industry—as evidenced by the fact that we will file for more than 3,000 patents this fiscal year," Gates said. Click here to read more about Microsofts push to build up a powerful patent portfolio.
Brad Smith, Microsofts general counsel, said the company has resolved the large majority of its legal issues, which Microsoft had said was a prerequisite to addressing its cash-management plans.
"While we still have a number of legal issues and we take them seriously, we have reduced the legal uncertainties facing the company, and we have a much clearer understanding of the potential risks involved in the cases that remain, such as the ongoing European Commission case." The U.S. Court of Appeals for the District of Columbia last month denied the Commonwealth of Massachusetts appeal for more stringent antitrust sanctions against Microsoft. The ruling brought to a close a longstanding case brought by the Department of Justice against the company. That victory in its U.S. antitrust case gave the company more leeway in its financial plans. Smith said in a recent news conference that the decision would give the company more financial flexibility. "We were very focused on waiting for this decision from the Court of Appeals, and todays decision does remove the last area of legal doubt that we were considering as a factor before we felt that we could move ahead with decision-making with respect to the companys financial reserves," Smith said. Wall Street analysts have also called on Microsoft to use its substantial cash reserves to issue a dividend or to buy back stock, an issue the company was expected to address during its July analysts meeting. The quarterly dividend announced Tuesday will be payable Sept. 14, and to shareholders of record on Aug. 25. The special dividend will be payable Dec. 2, and to shareholders of record on Nov. 17, conditioned upon shareholder approval of amendments to the employee stock plans at the annual shareholders meeting planned for Nov. 9. According to the companys most recent quarterly report on Form 10-Q, Microsoft had $56 billion in cash and short-term investments as of March 31. The company generated $15.8 billion in cash flow from operations on revenues of $32.19 billion in fiscal year 2003, the most recent year for which financial results have been reported. Microsoft also said at Tuesdays media conference that it would not be discussing its quarterly results for the fourth quarter of fiscal year 2004 or guidance for fiscal year 2005. The company will announce those quarterly earnings after the financial markets close Thursday. "All discussion of those topics will be deferred until that time," the company said. Check out eWEEK.coms Windows Center at http://windows.eweek.com for Microsoft and Windows news, views and analysis.

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Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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