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In this video tutorial, the presenter demonstrates how to compress a Microsoft Word document in order to reduce its file size. The importance of smaller file sizes for faster loading times, easier sharing, and optimizing storage space is highlighted. The process involves selecting images in the document, accessing the picture format tab, and clicking on the compress pictures icon. Options are adjusted in the compress pictures window, such as applying compression to all pictures and deleting cropped areas. Lower resolutions are then saved, ultimately reducing the overall size of the Word file.