Microsoft's $8.5 billion Skype deal lifts stocks


by Stan Choe

NEW YORK (AP) - Microsoft Inc. said it would buy Internet telephone service Skype for $8.5 billion in cash. Companies have built up a record amount of cash since the recession, and they have begun to use it to purchase rivals, pay dividends and buy back their own stock. Microsoft had $50.15 billion in cash and short-term investments at the end of March.

Large companies want to put their cash stockpiles to work because they're getting minimal returns on them, said Oliver Pursche, president of Gary Goldberg Financial Services. "The crisis is behind us, where we don't need this much cash anymore."

The Skype purchase is Microsoft's largest in its 36-year history.

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