Microsoft feeling no major impact from economy yet

SEATTLE (Reuters) - Microsoft Corp (MSFT.O) expects to see some economic slowdown eventually, particularly in the United States, but its business has not felt any major impact yet, Chief Financial Officer Chris Liddell said on Monday.

Liddell, speaking at a technology conference, said the software maker is "not blind to the fact that it's a difficult economic environment out there, in particular in the U.S. and to some extent in the rest of the world."

Microsoft has been helped by its geographic diversity and strong growth in emerging markets such as Russia, China, Brazil and India, he said.

"We certainly are conscious of the fact we might see some economic slowdown, but overall, our business hasn't been substantially impacted to date," he said.

"We won't be insulated from it. But having said that, our overall view is that technology spending remains relatively well intact, software spending will probably outgrow technology spending, and we believe we can outgrow software spending," Liddell said at the Morgan Stanley Technology Conference.

Last week, personal computer maker Dell Inc (DELL.O) warned that it was seeing large U.S. corporate customers holding back on spending, fueling concerns that the U.S. economy is in or near a recession.

Liddell was also asked about the company's view on increasing dividends versus share buybacks. He said he prefers spending more on buybacks because they create more value than dividends, which should be systematic and predictable.

Microsoft has spent $54 billion in the last two fiscal years on share buybacks and dividends, with the bulk of that going to repurchases.

Liddell's predecessor, John Connors, issued a one-time dividend of $3 a share in 2004, but Liddell seemed to dismiss chances of another big one-time payout.

"I'm not a great fan of large, one-off dividends, because I don't see that they create any value," he said.

(Reporting by Daisuke Wakabayashi, editing by Maureen Bavdek and John Wallace)