Skype, the video calling service that once defined the way people connected, is set to be retired in May. The service, notable for its popularity to the point that it became a verb, is being discontinued by Microsoft, which acquired it in 2011.
Microsoft announced the closure on X, formerly Twitter, on Friday. Users are encouraged to transition to Microsoft Teams, a collaborative communication app that offers real-time interaction, as an alternative to Skype.
Since its launch over two decades ago, Skype has faced increasing competition from services like FaceTime, WhatsApp, Zoom, and Slack, leading to its decline in popularity.
In a separate blog post, Microsoft explained that the move to shut down Skype aims to “streamline our free consumer communications offerings so we can more easily adapt to customer needs.”
Jeff Teper, president of Microsoft 360 collaborative apps and platforms, spoke to CNBC about the decision, saying the company had learned a lot from Skype but the time was right to transition. “We felt like now is the time 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 stated.
The announcement has prompted a range of reactions, notably from long-time users. One X user, Maphry, expressed concern, noting, “There are so many elderly who are not happy to change technologies anymore, but are used to this one over decades to keep in touch with their loved ones. It will require a lot of effort (usually by their families) to bring them over to alternatives.” Another user shared the impact of the service’s closing: “My best friend and I have long distance chatted with Skype several times a week for 5 years. This is actually so upsetting.”
Skype, founded in 2003 by Niklas Zennström and Janus Friis, was a pioneer in video conferencing, providing voice calls and messaging capabilities. eBay acquired Skype in 2005 for a substantial $2.6 billion. However, the online auction company later wrote down the value of Skype by $1.4 billion, acknowledging that the acquisition had not yielded the expected results.
In 2009, eBay sold its controlling stake in Skype to a group of investors, who later sold the service to Microsoft. At the time, this was Microsoft’s largest acquisition, costing the tech giant $8.5 billion. In 2011, NPR’s Planet Money reported on the deal, pointing out the growth in the smartphone and tablet market that Apple and Google were dominating, and Skype’s role in Microsoft’s strategy to compete in that space. The report stated that Microsoft was “getting clobbered” by Apple and Google, so acquiring the service made sense.
Skype’s user base has been decreasing in recent years, dropping from approximately 40 million in March 2020 to 36 million in 2023.
