Microsoft is set to retire Skype, the video-calling service it acquired for $8.5 billion in 2011, marking the end of a platform that significantly altered online communication. The tech giant announced on Friday that Skype will be discontinued in May, with some of its services transitioning to Microsoft Teams, its primary video-conferencing and team collaboration application.
Skype users will be able to use their existing accounts to access Teams. Microsoft has gradually prioritized Teams over Skype for several years, and this decision reflects the company’s aim to streamline its core communications app amidst growing competition.
Founded in 2003 by engineers in Tallinn, Estonia, Skype pioneered internet-based telephone calls, utilizing Voice over Internet Protocol (VoIP) technology to convert audio into digital signals for online transmission. After eBay acquired the service in 2005, Skype introduced video calls. “You no longer had to be a senior manager in a Fortune 500 company to have a good quality video call with someone else,” explained 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 enabled startups and individuals to bypass costly international phone calls. “You could suddenly have long calls, frequent calls, that were either free or very inexpensive,” Larson noted.
By 2011, when Microsoft acquired the service from eBay, Skype boasted roughly 170 million users globally, as then-Microsoft CEO Steve Ballmer announced during the merger event. “The Skype brand has become a verb, nearly synonymous with video and voice communications,” Ballmer stated at the time.
Skype remained relevant even in recent years. In 2017, the administration of President Donald Trump used Skype to field questions from journalists despite being far from the White House press briefing room. Microsoft launched Teams a month later, aiming to compete with workplace chat services like Slack Technologies, which had gained popularity.
Slack, Teams, and newer platforms like Zoom experienced a surge in use during the COVID-19 pandemic, as companies transitioned to remote work, and individuals sought new tools for virtual interactions. While Skype was already on the decline, it had initially created the groundwork for strengthening remote connections. “Higher-quality media can really deepen relationships and make people able to work through complex problems much better,” Larson concluded. “Suddenly, this was available to anyone with a decent internet connection. And that was the real sort of revolutionary role that Skype had.”
