In a deal that has some experts scratching their heads, Microsoft announced today that it's acquiring Skype for $8.5 billion.

Reuters' Bill Rigby writes that, while Skype's technology was groundbreaking at its height and is still quite valuable, it's hard to see how Microsoft will manage to get its money's worth:

Microsoft is hoping that more business users would be willing to pay for Skype if it is integrated with Outlook e-mail, which hundreds of millions of people already use, or that more gamers will pay to join the Xbox Live network if real-time video and voice services are added.

It should also allow its new Windows Phones to compete directly with Apple Inc and Google Inc smartphones, which already feature video chat.

But some investors carped that Microsoft already had the technology to do this, or should have developed it itself, and may soon be overtaken.

Peter Bright in Ars Technica writes that Microsoft certainly has technology it could have developed into the features it's hoping to get from Skype:

Microsoft's own software already has considerable overlap with Skype. Windows Live Messenger offers free instant messaging, and voice and video chat. It currently boasts around 330 million active users each month, typically with around 40 million online at any one moment. Microsoft has an equivalent corporate-oriented system, Lync 2010 (formerly Office Communication Server) that allows companies to create private networks that combine the communications capabilities of Live Messenger with corporate manageability. The underlying technology of both platforms is common, allowing interoperability between Live Messenger and Lync. The company also plans to integrate Kinect into Lync to create more natural virtual presences.

Even considering Skype's paying users, Bright writes, Microsoft still seems to have paid too much.

USA Today quotes IDC analyst Al Hilwa offering some explanation for the high price that Microsoft paid:

"If Skype ended up in the hands of Google, it might have been able to use it to strengthen its ecosystem at the expense of Microsoft," says Hilwa.

But keeping Skype out of the hands of Google,may have furthered a different company's agenda, says Om Malik of GigaOm:

The biggest winner of this deal could actually be Facebook. The Palo Alto, Calif.-based social networking giant had little or no chance of buying Skype. Had it been public, it would have been a different story. With Microsoft, it gets the best of both worlds: It gets access to Skype assets (Microsoft is an investor in Facebook) and it gets to keep Skype away from Google.

Facebook needs Skype badly. Among other things, it needs to use Skype's peer-to-peer network to offer video and voice services to the users of Facebook Chat. If the company had to use conventional methods and offer voice and video service to its 600 million plus customers, the cost and overhead of operating the infrastructure would be prohibitive.

Malik adds that Facebook could also help Skype garner more users and revenue.

"Two turkeys do not make an Eagle"

So tweeted Google VP Vic Gundotra earlier this week, casting judgment on what was then just a widespread rumor but was today confirmed: Finnish phone maker Nokia will be teaming up with Microsoft to take on the smart phone market. Nokia's storied mobile operating system, Symbian, will be scrapped and Nokia handsets will be built around Windows Phone 7 instead.

Despite generally good reviews, Microsoft's new assault on the phone market hasn't taken off as they or handset makers had hoped. And Nokia, which remains the world's largest phone maker, has failed to come up with a smart phone capable of competing with Android handsets or the iPhone.

It's too early to know what kind of devices the new pairing will come up with. But Engadget reports Nokia saying they will be aimed at the very top of the market: they're trying to create gadgets that steal the thunder of the iPhone and the most powerful Android handsets.

The end result, said Nokia chief executive, Stephen Elop, is that the smart phone market would now be a "three horse race."

In fact, choosing a new smart phone may be about to get even more complex: Intel and HP are in this race too.

Nokia may have now picked Windows, but in the last two years it had been working with Intel on the MeeGo mobile OS, designed to run on everything from phones to tablets to TVs. Intel now says it will go it alone and that MeeGo devices are still coming. And just two days ago HP refreshed its WebOS software for mobile devices, showing off a tablet and two phones that use the platform.

However, if the iPhone has taught us anything it is that success requires more than phones with good hardware and software, points out ubiqui-blogger Robert Scoble:

"Nothing matters in this world more than apps...HP execs know this. Google's execs know this. Everyone in Silicon Valley knows this. Apps are the ONLY thing that matters now."

Scoble thinks that the combination of Nokia's established ability to make good hardware with Microsoft's operating system might tempt app makers enough to see the new partnership succeed.

Today's announcements from the two main actors have been largely directed at the tech industry, investors and the business press. Expect the focus to shift to app developers and consumers - arguably the two groups most able to make or break this new effort - as Nokia and Microsoft try to make their strategy stick.

At a time when Google is promising to end search censorship in China, a new report has now revealed that Microsoft censors its Bing search engine returns in Arab countries even more heavily than the countries themselves do using national Internet filters. The study covered the United Arab Emirates, Syria, Algeria, and Jordan, and found heavy censorship of anything relating to sex.

"It is interesting that Microsoft's implementation of this type of wholesale social content censorship for the entire "Arabian countries" region is in fact not being practiced by many of the Arab government censors themselves," reads a new report from the Open Net Initiative (ONI), a partnership of the Citizen Lab at the University of Toronto, the Berkman Center for Internet & Society at Harvard, and the SecDev Group, a company in Ottawa. It adds: "It is unclear, however, whether Bing's keyword filtering in the Arab countries is an initiative from Microsoft, or whether any or all of the Arab states have asked Microsoft to comply with local censorship practices or laws."

ONI performed the study by testing the search terms inside the countries. Banned words include "sex," " "intercourse," "breast," "nude," and many more in both the English and Arabic language. The investigators also made a curious discovery: Bing engineers remembered to bar ordinary Arabs from searching for the word "penis" but not for the word "vagina." But they left no stone unturned when it came to blocking words that might lead to sites having to do with homosexuality.

When someone attempts to search most sex-related terms, Bing informs searchers: "Your country or region requires a strict Bing SafeSearch setting, which filters out results that might contain adult content."

The report comes just two days after a U.S. Sen. Richard Durbin, D-Ill, said during a hearing on Capitol Hill that he'd soon propose legislation imposing civil or even criminal sanctions against Internet companies that don't do enough to support freedom of expression and human rights abroad. The legislation has not yet been filed.