Microsoft announced on Friday that it will retire Skype in May, marking the end of the video-calling service it acquired for $8.5 billion in 2011.
The company will shift some of Skype’s services to Microsoft Teams, its flagship videoconferencing and collaboration platform, allowing users to log into Teams with their existing Skype accounts.
The decision reflects Microsoft’s long-standing strategy of prioritizing Teams over Skype as it consolidates its communications services amid growing competition.
Skype, founded in 2003 by Estonian engineers, was a pioneer in voice-over-internet protocol (VOIP) technology, enabling users to make online calls instead of relying on traditional landlines. eBay acquired Skype in 2005, adding video calls before selling it to Microsoft six years later.
At its peak, Skype had around 170 million users, and former Microsoft CEO Steve Ballmer once described the brand as “nearly synonymous with video and voice communications.” It played a key role in making high-quality video calls accessible to the public, reducing international call costs and benefiting businesses and individuals alike.
However, Microsoft launched Teams in 2017 to compete with workplace messaging platforms like Slack, signaling a shift in focus. The rise of Teams, Zoom, and other collaboration tools during the COVID-19 pandemic accelerated Skype’s decline, despite its early role in transforming virtual communication.
With Skype’s shutdown, Microsoft aims to streamline its communications portfolio, further integrating users into its Teams ecosystem as the demand for business-focused collaboration platforms continues to grow.
