What will the Big Tech Co's do with their cash?

Fred Wilson asks why companies in the main are not buying back their shares:

In bad bear markets, like we are in, investors look to corporations to defend their stock and Google has not yet shown an interest in doing that. That's something to look for. When you net out Google's cash, it's trading at $100bn, a mere 12x operating cash flow. That's value territory.

Let's look at News Corp. Rupert Murdoch's company, the best managed media company out there, is down 56% in the past year and is now trading at a mere six times operating cash flow. News Corp is also about 60% institutionally owned. So that means Rupert could buy out his external investors with four years of his cash flow. But we have yet to see him do that.

I could go on and on. Apple is worth $67bn after you back out the $20bn of cash they have on hand. It earns over $5bn a year. That's another value stock right there.

And those are some of the best US companies right there. The list goes on and on. Starbucks trades at 7x cash flow, Walmart trades at 10x cash flow, AT&T trades at 4x cash flow, and Comcast trades at 6x cash flow.

Anyway, the answer to Fred's question is actually probably contained in the second part of Fred's post:

The long-term effects of the Panic of 1873 were perverse. For the largest manufacturing companies in the United States — those with guaranteed contracts and the ability to make rebate deals with the railroads — the Panic years were golden. Andrew Carnegie, Cyrus McCormick, and John D. Rockefeller had enough capital reserves to finance their own continuing growth. For smaller industrial firms that relied on seasonal demand and outside capital, the situation was dire. As capital reserves dried up, so did their industries. Carnegie and Rockefeller bought out their competitors at fire-sale prices. The Gilded Age in the United States, as far as industrial concentration was concerned, had begun.

In other words, why buy your own stock when you can buy your competitor and take them out the market to boot? Also, 30% is not a big fall by "Panic" standards. I've shown the Dow graphed above for 1929 - 1933, courtesy About.com . Economists and experienced business people are well aware that in a big recession, cash is king - so I would expect all those cash rich corporations to be fully aware as well. Why buy back at 30% down when there is a real chance of buyback at 50, 60, 70% down? Also, they will want to see what their revenues look like at near bottom rather than as they go into it.

So what will the big Tech boys do with their cash - clearly reinforcing current positions and moving into complementary areas are easy wins, maybe take out the odd major competitor....if Google fell another 50% relative to Microsoft, the boys from Redmond could buy it for a song .