Last month when I stopped by for the launch of Microsoft (s MSFT) Windows Phone (8) event in San Francisco, of all the things that impressed me about the platform was the seamless integration of Skype into the operating system. It was almost invisible and you had to try hard to see if Skype was really there.  Microsoft Surface, too offers that seamless Skype experience. And today Microsoft announced that it is going to scrap its Windows Live Messenger  (WLM) product and instead transition about 100 million of these WLM users to Skype. All these folks will have to do is just download the new Skype 6.0 client and log-in using their WLM credentials. That is a nice way to goose up Skype’s overall base of users – 280 million by about a third, at the very least.

From the perspective of the proverbial M&A handbook, this is actually what Microsoft expected when it paid $8.5 billion for Skype, the peer-to-peer Internet telephony upstart. Microsoft, paid billions because of its senior executives, Joe Williams, who ran the Microsoft Lync business believed that Skype was going to eat Microsoft’s lunch in the enterprise. And he wasn’t wrong. So they bought the competition.

Skype has been an integral part of my daily life and a key communication tool since it launched. I use it for messaging, voice calls and video calls. It is important enough that I overlook what I think is third rate user experience, that has been slowly but surely declining. However, lately, one of Skype’s key value propositions — our ability to make phone calls has started to suffer.

Andy Abramson, who is a long time Skype user and also a VoIP watcher, puts it best when he writes: “It seems as Skype has revamped its’ architecture to co-exist with Microsoft Messenger, and eventually Microsoft Lync, that a lot of changes have been made, and for those of us who have been using Skype for a very, very, very long time, these changes are not for the better.”

The service has been so busy trying to integrate itself with Microsoft, that its overall experience has started to suffer. Skype has been building out its own super nodes (made up of server clusters) and its own infrastructure. And in theory it is a good idea, but in reality the quality of the calls has started to degrade after you have been on the call for a few minutes. If you have used the service as long as I have, then you notice, the calls are taking longer to set-up.

Skype is just a shell of its former self — it is Microsoft in Skype’s clothing. And the latest news of transitioning Messenger users to Skype only reinforces that.