Microsoft Doubles Dividend

The software vendor is boosting its annual dividend to 16 cents a share.
REDMOND, Wash. (AP) -- Microsoft Corp. is doubling its annual dividend to 16 cents a share.

The fiscal 2004 dividend--only the company's second ever--is payable Nov. 7 to shareholders of record at the close of business Oct. 17.

Microsoft described the payment in a news release Friday as its "second annual dividend," apparently because it is being paid in the company's fiscal year 2004, which began July 1. The software giant paid its first ever dividend in March.

Shares of Microsoft fell 17 cents to $27.67 in morning trading on the Nasdaq Stock Market.

The announcement comes less than two months after a top executive threw cold water on the idea. At an annual conference for analysts July 25, Microsoft chief financial officer John Connors insisted that the company had no plans to declare another dividend, despite its $49 billion cash hoard.

As he had said in the previous week, Connors told the analysts that Microsoft would not issue another dividend until a number of legal issues were resolved, including an inquiry by the European Union and a lawsuit by Sun Microsystems alleging uncompetitive practices.

It was not clear what prompted the apparent turnabout. A Microsoft spokesman did not immediately return a call for comment.

On Aug. 6 the EU's executive Commission accused Microsoft of trying to monopolize markets for server software and audiovisual players and gave the company what it said was a last chance to defend itself before demanding changes in its Windows operating system.

After four years of investigating the company, the Commission, said recent information from businesses across Europe and the United States showed abuses were "still ongoing."

The next day, Tilman Lueder, a spokesman for the EU's antitrust office, said the consortium intended to fine Microsoft for past antitrust actions regardless of any change the company makes in future business practices.

A week ago Microsoft agreed to pay $23.3 million to Be Inc. to settle an antitrust lawsuit that claimed the software giant negotiated deals with computer makers that cut out the smaller company's competing operating system.

The case was one of four private antitrust suits that were filed after a federal judge ruled that Microsoft had used its dominance in desktop operating systems to act as an illegal monopoly.

One of those cases was resolved in May when Microsoft agreed to pay AOL Time Warner $750 million to settle a lawsuit on behalf of AOL's Netscape division.

The other two cases, filed by Sun Microsystems and, remain in pretrial proceedings in U.S. District Court in Baltimore.

Editor's Choice
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
Terry White, Associate Chief Analyst, Omdia
Richard Pallardy, Freelance Writer
Cynthia Harvey, Freelance Journalist, InformationWeek
Pam Baker, Contributing Writer