Microsoft has announced the retirement of Skype, the once-dominant voice-over-IP (VoIP) service, with the shutdown scheduled for May 5, 2025. This decision marks the end of an era for the platform and reflects Microsoft’s strategic shift toward its communications and collaboration hub, Microsoft Teams (free).
Jeff Teper, President of Collaborative Apps and Platforms at Microsoft, confirmed the news in a recent blog post. The tech giant is streamlining its consumer communication offerings to better meet customer needs and will be focusing on Microsoft Teams (free).
Skype’s origins trace back to a peer-to-peer music sharing program called Kazaa, evolving into a popular platform for making calls over the internet without incurring phone company charges. eBay acquired Skype in 2005 for $2.5 billion, initially with plans to integrate it into its auction process. However, that integration never came to fruition.
Subsequently under eBay’s ownership, Skype introduced video calls, further boosting its popularity. But the company later admitted they had overvalued the unit and offloaded most of its stake to a venture capitalist.
In 2011, Microsoft acquired Skype for $8.5 billion, its largest acquisition at the time. The move, however, was not without controversy. A 2017 redesign introduced Snapchat-like features, which angered many users who felt the changes detracted from Skype’s core functionality.
Earlier attempts to update the platform met resistance as well. In 2018, Microsoft announced the retirement of Skype 7.0 (Classic Skype), urging users to upgrade to version 8.0. This move was met with significant backlash from users who preferred the classic interface, leading Microsoft to reverse its decision and continue support for the older version.
Competition from services like WhatsApp, Messenger, Signal, and FaceTime contributed to a decline in Skype’s usage. By 2023, Skype had 36 million daily active users, a decrease from 40 million in March 2020.
Teper noted that Microsoft Teams offers many of the same core features as Skype, including one-on-one and group calls, messaging, and file sharing. In addition, Teams provides enhanced features like meeting hosting, calendar management, and community building, all available for free.
Users will be able to use their Skype credentials to access Microsoft Teams, and they have the option to export their data, including chats, contacts, and call history. Microsoft is providing resources to assist users in migrating to Teams.
“Thank you for being part of Skype,” Teper wrote. “Skype has been an integral part of shaping modern communications and supporting countless meaningful moments, and we are honored to have been part of the journey.”
“We also understand that change can be challenging and want you to know that we’re here to support you every step of the way,” he concluded. “We’re excited about the new opportunities that Teams brings and are committed to helping you stay connected in new and meaningful ways.”
