Ballmer gives the OK

Instead of pouring dollars in research and development over the short-term, Microsoft plans to invest more in small acquisitions costing between "$50 million and $1 billion," according to Reuters.

Sitting on $23 billion in cash, Microsoft has already purchased 23 companies in the 2007 fiscal year, including biggie aQuantive for $6 billion.

"We'll probably buy 20 companies a year for the next five years," said Microsoft CEO Steve Ballmer at the Web 2.0 Summit in San Francisco.

Ballmer would not say if the rumors are true about the company's intentions to buy a stake in Facebook. At one point, there was also talk of buying interest in Yahoo to double-team against Google.

Ballmer also expressed the firm's commitment to boosting search, which currently lags behind competitors.

In September Microsoft placed third in overall searches with 10.3 percent, according to comScore. Google led with 57 percent, while Yahoo took second place with 23.7 percent.