Microsoft shutting down Skype in May

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Microsoft is closing down Skype, the video-calling service it bought for $8.5 billion in 2011, which had helped spark a transformation in how people communicate online.

The tech giant said Friday it will retire Skype in May and shift some of its services to Microsoft Teams, its flagship videoconferencing and team applications platform. Skype users will be able to use their existing accounts to log into Teams.

Microsoft has for years prioritized Teams over Skype and the decision to fold the brand reflects the tech giant’s desire to streamline its main communications app as it faces a host of competitors.

Founded in 2003 by a group of engineers in Tallinn, Estonia, Skype was a pioneer in making telephone calls using the internet instead of landlines. It relied on VOIP, voice over internet protocol, technology that converts audio into a digital signal transmitted online. Skype added video calls after online retailer eBay bought the service in 2005.

“You no longer had to be a senior manager in a Fortune 500 company to have a good quality video call with someone else,” said Barbara Larson, a management professor at Northeastern University who studies the history of virtual and remote work. “It brought a lot of people around the world closer.”

The ability to bypass expensive international phone calls to connect with far-flung coworkers was a boon for startups, but also people outside of the business world.

“You could suddenly have long calls, frequent calls, that were either free or very inexpensive,” Larson said. As with other new platforms, scammers also made use of it.

By 2011, when Microsoft bought it from eBay, Skype had about 170 million users worldwide, then-Microsoft CEO Steve Ballmer said in an event announcing the planned merger.

“The Skype brand has become a verb, nearly synonymous with video and voice communications,” Ballmer said at the time.

Skype was still considered high-tech in 2017 when recently inaugurated President Donald Trump’s administration used it to field questions from journalists far from the White House press briefing room. It was a month later when Microsoft launched Teams, an attempt to catch up to the growing demand for workplace chatting services sparked by upstart rival Slack Technologies.

Slack and Teams, along with newer video platforms such as Zoom, saw explosive growth during the COVID-19 pandemic as companies scrambled to shift to remote work, and even families and friends looked for new tools for virtual gatherings. Skype, by then, was already on the wane but had paved the way for strengthening the connections people can build remotely.

“Higher-quality media can really deepen relationships and make people able to work through complex problems much better,” Larson said. “Suddenly, this was available to anyone with a decent internet connection. And that was the real sort of revolutionary role that Skype had.”