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A commenter on this blog, L. Zhang, made an excellent point that most of Google's cash is trapped overseas. Repatriating it to the US to buy US companies would cost them 35% in tax.

Borrowing US money at 3.75% to buy US companies is far cheaper than using their own cash reserves.

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Accoring to http://torontostar.morningstar.ca/globalhome/industry/news.a... Google has 17 Billion offshore and 20 Billion in US they are not as cash strapped as Microsoft which has almost all its cash outside of US.

Borrowing at 3.75% is like getting free money. Real inflation rate is higher anyway.

http://www.shadowstats.com/alternate_data/inflation-charts

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