Microsoft (MSFT) has officially become a dinosaur. By that we mean a large, mature company whose growth prospects have become limited. Shareholders will gain through dividends and share buybacks, rather than organic growth in earnings and capital gains going forward. This is the natural fate of any successful business, but it is interesting to see it unfold in front of your eyes.

This was evidenced by rumors that it will announce a huge buyback of around $20 billion soon. This action would signal to the market that it doesn’t have anything better to do with all of that cash, so it will buy its own stock back. A company with strong growth prospects would invest this cash in positive net present value projects. The market will probably like it because earnings per share will increase nicely, and the stock could rise, but it definitely says something about what the folks in Redmond think about their own opportunities.