In fact the company issued a special $30 billion dividend early in Ballmer's tenure. The Federal Reserve had to correct for this in their quarterly report, because it was an economic event felt across the entire country.
Even so, it wasn't enough. Shareholders of MS stock realized a 25% return due to dividends over the last 6 years, nearly half of it due to that one $3 per share dividend. In contrast, Google shareholders realized a 177% investment gain, Amazon shareholders a 370% gain, and Apple shareholders a 900% gain. This would be fine if Microsoft were in a different industry than these guys, but they're not. If anything Microsoft's business is most similar to Apple's (or at least had been). Microsoft's failure to capitalize on markets other than their core OS/platform and Office is very, very much reflected in their current stock price.
Past performance is no indication of future performance. Looking back, buying Microsoft in 2000 with a P/E of 60 was a stupid thing to do. But, that says nothing about buying it today with a P/E of 10. IMO, Microsoft is a great value play and but nothing to write home about, however Apple (16x) is slightly over priced and Google (20x) is stupidly overpriced.
On the one hand this is sound analysis, Apple and Google do look stupidly overpriced, and MSFT does look stupidly underpriced. However, I think there is an underlying rationality to these phenomena. I am not convinced that MS will even be a major player in the industry in the next 20 years, due to failing to miss opportunity after opportunity in capturing new markets and reacting well to defend or migrate their existing high revenue products from disruptive innovation. Meanwhile, Google and Apple continue to expand their businesses at an impressive pace, in some cases creating new multi-billion dollar markets as they do so.
Given the expected substantial growth of per-capita wealth throughout parts of the developing world (e.g. much of Asia especially China, parts of India, much of South America, parts of Eastern Europe, etc.) and the consequent expansion of the population of the affluent, developed world the potential future market in the computer software/hardware/services industries is likely to be enormous. The companies that manage to cement themselves firmly into the future mainstream mechanisms for people to buy physical and digital goods online as well as the mechanisms for obtaining access to the online world will be well seated to collect substantial revenues from that expanded market. And Apple, Google, and Amazon are much better situated and seemingly much more capable of capitalizing on new forms of markets than Microsoft is. I believe all of that is, to varying extents, reflected in their respective stock prices, and I think it's a very valid view of the state of those companies.
