Microsoft is saying goodbye to Skype. The company plans to retire its video-calling service, which it purchased for $8.5 billion in 2011, in May. The move is being made in favor of Microsoft Teams, its flagship video conferencing and team applications platform.
Skype users will be able to use their existing accounts to log in to Teams, Microsoft said Friday. This decision reflects the tech giant’s ongoing prioritization of Teams over Skype for several years, and the desire to streamline its primary communications app amid growing competition.
Founded in 2003 by engineers in Tallinn, Estonia, Skype helped pioneer internet-based telephone calls instead of landlines. It utilized VOIP technology, which converts audio into a digital signal and transmits it online. Skype added video calls in 2005 after online retailer eBay bought 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,” said Barbara Larson, a management professor at Northeastern University, who studies the history of virtual and remote work. “It brought a lot of people around the world closer.”
The service’s ability to bypass expensive international phone calls was a boon to startups and individuals outside the business world. “You could suddenly have long calls, frequent calls, that were either free or very inexpensive,” Larson explained.
However, like other new platforms, Skype was also used by scammers. By 2011, when Microsoft acquired Skype from eBay, it had approximately 170 million users worldwide. At the time, then-Microsoft CEO Steve Ballmer said during an event announcing the planned merger, “The Skype brand has become a verb, nearly synonymous with video and voice communications.”
Even in 2017, Skype was still considered high-tech. The recently inaugurated administration of President Donald Trump used the platform to take questions from journalists located far from the White House press briefing room.
It was about a month later that Microsoft launched Teams, an attempt to compete with the rising demand for workplace chatting services. This demand was spurred by Slack Technologies, a startup rival. Slack and Teams, alongside newer video platforms like Zoom, saw explosive growth during the COVID-19 pandemic. Companies scrambled to shift to remote work while families and friends searched for virtual gathering tools.
Though already declining, Skype had already paved the way for strengthening remote connections. Larson noted, “Higher-quality media can really deepen relationships and make people able to work through complex problems much better.” She added, “Suddenly, this was available to anyone with a decent internet connection. And that was the real sort of revolutionary role that Skype had.”
