Microsoft is set to retire Skype, the video-calling service it acquired in 2011 for $8.5 billion, marking the end of an era for a platform that revolutionized online communication. The company announced on Friday that Skype would be discontinued in May, with some of its services transitioning to Microsoft Teams, its primary videoconferencing and team applications platform. Existing Skype users will be able to access Teams using their current accounts.
For years, Microsoft has prioritized Teams over Skype, and this decision reflects the tech giant’s aim to consolidate its main communications application amidst intense competition. Skype, originally developed in 2003 by a team of engineers in Tallinn, Estonia, was an early innovator in internet-based telephony, utilizing Voice over Internet Protocol (VoIP) technology to transmit audio digitally. After eBay acquired Skype in 2005, video calls were added to the service.
“You no longer had to be a senior manager in a Fortune 500 company to have a good quality video call with someone else,” noted Barbara Larson, a management professor at Northeastern University who studies the evolution of virtual and remote work. “It brought a lot of people around the world closer.”
This capability to bypass expensive international phone calls was particularly beneficial for startups and individuals outside of the corporate world. According to Larson, “You could suddenly have long calls, frequent calls, that were either free or very inexpensive.”
However, like other new platforms, Skype also became a target for scammers.
By 2011, when Microsoft acquired Skype from eBay, the platform had approximately 170 million users globally, as then-Microsoft CEO Steve Ballmer stated during the announcement of the merger. “The Skype brand has become a verb, nearly synonymous with video and voice communications,” Ballmer said at the time.
Even as late as 2017, Skype was still considered a cutting-edge technology. The recently inaugurated President Donald Trump’s administration used it to field questions from journalists located far from the White House press briefing room.
A month later, Microsoft introduced Teams in an effort to address the increasing demand for workplace chat services, driven in part by the emergence of Slack Technologies. During the COVID-19 pandemic, Slack and Teams, alongside newer video platforms like Zoom, experienced exponential growth as businesses quickly adopted remote work strategies and individuals sought virtual gathering tools. While Skype’s influence had waned by that point, it played a vital role in fostering the connections individuals could build remotely.
Larson further noted, “Higher-quality media can really deepen relationships and make people able to work through complex problems much better. Suddenly, this was available to anyone with a decent internet connection. And that was the real sort of revolutionary role that Skype had.”
