Well, that’s one thing they can do with all their cash… Rather than buy anyone else, the Microsoft (NSDQ: MSFT) board has authorized the company to spend $40 billion on buying its own shares through September 30, 2013. In addition, the company is upping its quarterly dividend to $.13 per share, from $.11 previously. We’ve discussed several times in the past what Microsoft might do with all the cash burning a whole in its balance sheet. No doubt the company will keep making acquisitions, but once Yahoo (NSDQ: YHOO) fell through, there was nothing out there likely to move the needle. Hence a big share buyback was always a possibility. Just last month, UBS analyst Heather Bellini predicted a major buyback. Of course, the company isn’t obligated to spend the whole $40 billion. In the announcement, the company says it may tap the debt markets from time to time for working capital and to fund the share buy. Release.

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Like many tech companies, Microsoft was, for a long time, reluctant to do anything that smacked of maturity, like buyback shares or issue a dividend. That changed in a significant way, in 2004, when it announced a special one-time, $3 per share dividend worth around $32 billion. Shares of Microsoft are up nearly 5 percent pre-market.