Microsoft announced Friday that it will discontinue Skype, the once-dominant internet calling service, on May 5, marking the end of a two-decade run that redefined online communication. The move is part of the company's broader strategy to consolidate its communication platforms, focusing on Microsoft Teams as its primary service for voice and video calls.
"We are honored to have been part of the journey," Microsoft said in a statement. "Skype has been an integral part of shaping modern communications." The company assured users that they could transition seamlessly to a free version of Teams, with their existing chats and contacts migrating automatically.
Skype, founded in 2003, became synonymous with internet-based calling and video conferencing, at one point boasting hundreds of millions of users. The platform's popularity surged in the mid-2000s as it disrupted traditional landline and mobile communication. It was widely adopted by businesses and individuals, so much so that "Skyping" became a commonly used verb.
Microsoft acquired Skype in 2011 for $8.5 billion, outbidding Google and Facebook in what was then its largest acquisition. At the time, the service had approximately 150 million monthly users. However, Skype struggled to evolve with the rise of mobile-first applications such as Apple's FaceTime, WhatsApp, and Zoom. By 2020, its monthly active users had dropped to around 23 million, despite a brief resurgence during the COVID-19 pandemic.
During the pandemic-driven remote work boom, Microsoft prioritized Teams, integrating it with its Office suite to attract corporate users-a segment that had once been a stronghold for Skype. The shift left Skype increasingly sidelined, and its decline became more apparent as competing services like Zoom and Google Meet gained traction.
Jeff Teper, president of Microsoft 365 collaborative apps and platforms, told CNBC that the decision to retire Skype was made to "streamline our free consumer communications offerings so we can more easily adapt to customer needs." He added, "We've learned a lot from Skype over the years. ... But 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."
For some, the announcement was met with surprise, given Skype's diminishing presence in recent years. Others expressed frustration, particularly longtime users who relied on the platform for personal communication. "This is shocking," one user posted on X. "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." Another user lamented, "My best friend and I have long-distance chatted with Skype several times a week for five years. This is actually so upsetting."
Skype's history is marked by multiple ownership changes. In 2005, eBay acquired the platform for $2.6 billion but later admitted that it had overestimated its potential. The online auction company took a $1.4 billion write-down on Skype before selling a controlling stake to a group of investors in 2009. Two years later, Microsoft took full ownership, hoping to integrate Skype into its growing ecosystem of software and services.
Despite early dominance in internet communication, Skype's legacy became one of missed opportunities. Microsoft struggled to adapt the platform to the mobile era, and when it introduced Teams in 2017, Skype's fate was effectively sealed. By 2023, its user base had dwindled to 36 million, a far cry from its peak years.
Microsoft confirmed that there would be no layoffs associated with Skype's shutdown. The company did not disclose the platform's current user count but noted that Teams has around 320 million monthly active users.
