I definitely agree. They have some top notch researchers, certainly.
I also agree that the budget comparison is apples and oranges, so I'm not quite sure why you brought it up. The OP made a grandiose claim about Microsoft's academic research funding, and made it quite clear with his discussion of Google that corporate research does not count. So I want a source for the amount of money Microsoft spends on pure academic research without the corporate ties.
Personally, I think if Microsoft spent anywhere close to a billion dollars on pure academic research, the funding situation in CS academia would be completely different. Microsoft grants would be pursued just as hard as NSF grants, because they would be such a major funding source. But that is not the case. Corporate grants are afterthoughts compared to the NSF for academics. Additionally, if Microsoft were plunking such a large amount of money into academic research, I assume they would at the very least publish that figure in a PR piece to cash in on some public good will.