Microsoft (like Apple, Google, etc) has a large portion of their profits stuck overseas and can't repatriate that money without paying US income taxes on it. That's why spending the money internationally is appealing to them.

Does it mean that they can't pay dividends using their oversea money?

I only understand the broad strokes well enough to say for certain. My assumption is that they can do anything they want with the "Double Irish" money, but they avoid bringing it back into the US if at all possible since they'd have to pay corporate income tax on it at that point.

Yep, the same thing Facebook is doing with Whatsapp, Instagram...pure NSA surveillance strategy, nothing to do with Capitalism. puts titanium hat