Microsoft is set to retire Skype on May 5th, 2025, marking the end of an era for one of the earliest online voice and video calling platforms. Jeff Teper, president of Microsoft collaborative apps and platforms, stated the company is “honoured to have been a part of the journey.” The move comes after more than two decades since Skype’s initial launch, and Microsoft cited its own platform, Microsoft Teams, as the primary reason for the decision.
Skype, which originated in 2003 in Estonia, was acquired by Microsoft in 2011 for a substantial $8.5 billion. This acquisition was the largest in Microsoft’s history at the time, reflecting the service’s value to its 170 million users. Then-CEO Steve Ballmer praised Skype as a “phenomenal service” at the time, emphasizing its role in connecting families and friends globally. After the acquisition, Skype became a key component in integrating numerous Microsoft services, like Outlook and Xbox Live.
Over the years, Skype faced increasing competition from services such as Microsoft Teams, Zoom, Apple’s FaceTime, and Google Meet, all of which offered similar capabilities and, in some cases, enhanced features. The introduction of these platforms led to a decrease in the usage of Skype. According to Teper, Microsoft learned a great deal from Skype, and has brought those lessons into Teams over the last seven to eight years. “But we felt like now is the time [to shut down Skype] because we can be simpler for the market, for our customer base, and we can deliver more innovation faster just by being focused on Teams,” Teper explained.
Skype’s user base steadily declined in recent years, with only 36 million daily active users in 2023, down from 40 million in 2020. Microsoft Teams, which launched in 2017, claimed 300 million daily users by 2023. Following recent announcements of the platform’s shutdown, Teper stated that Skype users will be able to use their credentials to access the free version of Microsoft Teams and migrate their data. A Microsoft representative confirmed there would be no job losses due to the shutdown.
Skype’s history includes several ownership changes prior to its acquisition by Microsoft. The service was later taken over by eBay in 2005 for $2.6 billion. However, eBay reported disappointing financial returns, resulting in a $1.4 billion write-down in 2007. eBay then sold 70% of its shares to Silver Lake, a private equity firm, in 2009. Shortly after, Microsoft finalized the acquisition.
