REDMOND, WASH. Gates: Microsoft to raise its spending, add jobs

Microsoft will hold onto its $49 billion in cash until legal issues are resolved.
REDMOND, Wash. (AP) -- Microsoft Corp. will spend $6.9 billion in the coming year on research and development and add up to 5,000 positions as part of its plan to spread its software to wireless phones, video-game consoles and other devices, chairman Bill Gates said.
The company's research and development spending is expected to increase about $500 million from last year's budget, including the effect of Microsoft's plan to begin expensing employee stock issues. The new funds will go toward improving the security of its software and simplifying the task of updating multiple computers in a network, Gates and other Microsoft executives said.
"It's a serious number," Gates said Thursday in his speech at Microsoft's annual financial analysts conference at its Redmond campus. He cited research in speech-recognition software, new note-taking software and development of "WinFS," technology for a new file system to allow a single search to find anything on a computer.
Boosting U.S. employment
About 3,000 to 3,500 jobs will be added in the United States. Microsoft employs about 54,000 people worldwide.
John Connors, Microsoft's chief financial officer, also reiterated the company's decision to conserve its $49 billion cash hoard -- a persistent target for shareholders who have sought dividend payments.
Last week, he said the company won't issue another dividend until it overcomes some remaining legal issues, including an inquiry by the European Union and a lawsuit by Sun Microsystems. He repeated that message Thursday.
Microsoft executives outlined their plans for the year ahead, highlighting efforts to extend Microsoft software beyond its traditional personal computer market. Those efforts include Music Mixer software, to be released later this year, which can allow Microsoft Xbox video-game console customers to store digital music and photos on the consoles' hard drives; a new version of Microsoft's operating software for handheld devices; and new note-taking software to spur adoption of Tablet PCs, notebooklike laptop computers.