Upbeat Microsoft raises dividend

Microsoft's chairman believes the company has much to smile about

Microsoft has raised its quarterly dividend payment thanks to optimism about sales of its Xbox video games console and other software products.

The US software giant said shareholders would receive 9 cents per share, up a cent on recent dividend payouts.

Microsoft's share price has been flat in recent years, after soaring in the late 1990s, as investors questioned the company's outlook for earnings growth.

Its dividend has been held at 8 cents over the past 12 months.

The dividend news came as wireless e-mail firm Visto said it was taking legal action against Microsoft.

Visto said it had filed a lawsuit accusing the software firm of infringing on its patents relating to e-mail access to mobile phones.

Exciting line-up

The California-based firm said it was seeking an injunction to stop Microsoft from "misappropriating" its technology.

Microsoft said it was investigating the claims, but insisted it "respects the intellectual property rights of others".

Microsoft said the new higher three-month dividend would be payable to qualifying shareholders in March.

Analysts believe the company has previously been reluctant to dip too deeply into its reserves for dividend payouts because of fears some of the money would be needed for legal disputes.

Microsoft was forced to bow to shareholder pressure in November 2004 and pay a one-off $3 a share dividend. At the time its reserves stood at more than $64bn.

Chief financial officer Chris Liddell said the company was upbeat about it immediate growth prospects.

"We...have an exciting product line-up, which includes major releases like Xbox 360, SQL Server 2005, Office 12 and Windows Vista," he said.