How is size of a picture reduced using MS Office?

you can select the picture and go to properties then check no compre options.

Microsoft pointed out that the registration in the Office service 365 education free will allow students and teachers to get the latest version of Office included programs such as Word, Excel and PowerPoint and Wan Knott addition to the free storage space on the "onedrive" service cloud up to 1 terabyte.Registered users in the free service and can install the latest version of Office on multiple computers, whether Mac or the Windows operating system and in addition to five mobile devices, whether smartphones or Tablet PCs.It is noteworthy that the free service will support Arabic and Hebrew language in the middle of March, according to Macrosowic which also pointed out that the service is not available for self-registration by students or teachers in China, unlike the rest of the countries around the world announced

it is normal, and as you can you can reducing and also you can change the kind or formatting.  

We can insert pictures in MS office as BMP, JPEG, PNG ...etc formates with high quality... It not reducing the size when attach the file... but when you taking any picture from MS file it will be reduced to a normal size...

Pictures can dramatically increase the file size of your 2007 Microsoft Office system document. To save room on your hard disk drive and to reduce download times, you can reduce image resolution, apply compression with no loss of quality, and discard unwanted information, such as the cropped parts of an image.

Only certain image types can be optimized, or reduced in file size with minimal loss in quality, and they have to be inserted in your 2007 Office release document in a way that makes them editable by Microsoft Office Excel 2007, Microsoft Office Outlook 2007, Microsoft Office PowerPoint 2007, or Microsoft Office Word 2007. To insert a picture or other image, on the Insert tab, in the Illustrations group, use the buttons to store the image as a picture file in the 2007 Office release document.

When you do not need every single pixel in an image to get an acceptable version of it for your target destination, you can reduce or change the resolution. Reducing or changing the resolution can be effective with images that you have scaled to be smaller, because their dots per inch (dpi) actually increase in that case. Changing the resolution can affect image quality