Microsoft is shutting down Skype, the video-calling platform it acquired for $8.5 billion in 2011. Skype played a major role in changing the way people communicate online. The company announced on Friday that it will retire Skype in May and transition some of its features to Microsoft Teams, its primary platform for video conferencing and team collaboration. Skype users will be able to use their existing accounts to log into Teams.
For several years, Microsoft has focused more on Teams than Skype, and this move to phase out Skype reflects the company’s effort to streamline its communication tools amid growing competition.
Skype was founded in 2003 by a group of engineers in Tallinn, Estonia, and was a trailblazer in enabling phone calls over the internet using VOIP (Voice Over Internet Protocol) technology. The platform later added video calling after being acquired by eBay in 2005.
Barbara Larson, a management professor at Northeastern University who specializes in the history of virtual and remote work, said, “You didn’t have to be a senior manager at a Fortune 500 company anymore to have a high-quality video call with someone.” She emphasized that Skype played a key role in connecting people globally, making communication more accessible to a broader audience.
The ability to avoid costly international phone calls and easily connect with distant colleagues was a major advantage for startups, as well as for individuals outside the corporate world.
“You could suddenly make long and frequent calls that were either free or very low-cost,” said Larson. However, like with other new platforms, scammers took advantage of it as well.
By 2011, when Microsoft acquired Skype from eBay, the service had approximately 170 million users worldwide, as reported by then-Microsoft CEO Steve Ballmer during the announcement of the merger.
“At that point, the Skype brand had become so popular that it was nearly synonymous with video and voice communication,” Ballmer remarked at the time.
Skype was still seen as a cutting-edge tool in 2017 when President Donald Trump’s administration used it to field questions from journalists located far from the White House press briefing room. Just a month later, Microsoft introduced Teams, aiming to compete with the rising demand for workplace chat services driven by the success of Slack Technologies.
During the COVID-19 pandemic, platforms like Slack, Teams, and newer video tools such as Zoom experienced rapid growth as businesses transitioned to remote work. Families and friends also turned to these platforms for virtual gatherings. By then, Skype’s popularity had declined, but it had already played a crucial role in enhancing remote connections.
“Higher-quality media really helps strengthen relationships and enables people to solve complex problems more effectively,” Larson explained. “This was suddenly available to anyone with a decent internet connection, and that was the revolutionary impact Skype had.”