Microsoft Moves on Class Actions

The announcement comes days before the one-year anniversary Saturday of U.S. District Court Judge Colleen Kollar-Kotelly's ruling largely upholding the antitrust settlement hammered out by the Justice Department in 2001. Only one state, Massachusetts, is appealing that decision, with oral arguments on the appeal scheduled next month.

And other legal fights also still hang over Microsoft. In mid-November, the European Commission will hold an oral hearing in its antitrust case against Microsoft. The EC has charged that Microsoft leveraged its dominant position from the PC into low-end servers and tied its Windows Media Player to its operating system.

In addition, an antitrust lawsuit filed by rival Sun Microsystems(SUNW) is pending in the court. The litigation path in the Sun case has a "long ways to go," Smith said.

"It would be premature for anyone to conclude that all of our antitrust issues are resolved while these three cases are pending," Smith said. He added that its legal experience has made the world's largest software maker realize the importance of constructive and collaborative relationships with other tech companies -- a statement that is likely to be met with some skepticism.

Microsoft has cited its legal battles as the obstacle holding it back to paying a larger dividend to shareholders. So with more antitrust class-action settlements, that obstacle shrinks. At the end of last week, Goldman Sachs analyst Rick Sherlund said Microsoft also may have held off declaring a bigger dividend during the summer because it was hammering out details of an employee stock option exchange program with J.P. Morgan.

With that out of the way and Microsoft's cash on hand likely to surpass $55 billion and approach $60 billion in the company's March quarter next year, Microsoft may finally do something, Sherlund said. "I think the company is on board with the desire to do something with the cash now," he said. Sherlund has an outperform rating on Microsoft and his firm has done banking with the company.

Shares of Microsoft gained 14 cents, or 0.5%, to $27.05 in recent trading.

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