Microsoft is always in the limelight for one reason or the other. This time around, it has attracted attention for doing something remarkably different. For a company that has constantly been criticized for sitting on a massive cash pile, Microsoft’s decision to return some of it to shareholders is a significant move. In a specially convened press conference in July this year, days before its fourth quarter and fullyear results were to be announced, Microsoft disclosed its dividend and share buy-back plan worth $75 bn. The markets have cheered the move even as investors are still coming to terms with this totally unprecedented move.

Microsoft’s cash pile has become an infamous legend. It is one of the biggest cash churning machines, and is said to be making more than a billion dollars in cash every month. Over the years, its cash has constantly increased and by June 2003, it had reached a record figure of $49.05 bn . At the end of the financial year 2004, which for Microsoft ends on June 30, its cash and short-term investments increased to $60.59 bn. With shareholders repeatedly demanding dividends as well as share buy-back, speculation as to how the company should ideally make use of its cash have been ripe for quite sometime. However, Microsoft staved off such demands successfully citing legal uncertainties. Given this background, the largesse of Microsoft has taken many by surprise.