Microsoft has announced the closure of Skype, a well-known video-calling platform it acquired for $8.5 billion in 2011. This decision comes as the company plans to retire Skype by May and integrate some of its functionalities into Microsoft Teams, its premier videoconferencing and team collaboration app. Skype account holders will seamlessly transition to using Teams with their existing login credentials.
For years, Microsoft has been shifting its focus towards Teams rather than Skype, indicating a strategy to unify its communication tools amidst competitive pressures. Originally established in 2003 by engineers in Tallinn, Estonia, Skype broke new ground in communication by utilizing the internet to make calls, a novel alternative to traditional landlines. The service used VOIP, or voice over internet protocol, to convert audio into a digital signal, and augmented its offerings with video calls shortly after being acquired by eBay in 2005.
“Skype democratized video calls, no longer limiting high-quality communication to senior executives in large corporations,” commented Barbara Larson, a management professor at Northeastern University who explores the evolution of virtual work. “It helped connect people from various parts of the world.” This ability to make affordable international calls was a game-changer for startups and individuals outside the business realm.
“It enabled long, frequent calls that were either free or very cheap,” Larson explained, while acknowledging that it also attracted some misuse by scammers. By the time Microsoft bought Skype from eBay in 2011, the platform boasted around 170 million users globally. Steve Ballmer, the then-CEO of Microsoft, recognized Skype’s brand strength, equating it with video and voice communication.
Skype remained influential even in 2017 when the Trump administration utilized it to engage journalists who were not present at White House briefings. However, within a month, Microsoft launched Teams to compete with emerging workplace communication platforms like Slack. As Slack and Teams gained traction, especially during the COVID-19 pandemic, platforms like Zoom also rose to prominence.
These newer platforms facilitated the shift to remote work and virtual social gatherings. Although Skype’s relevance had declined by then, it had undeniably set the stage for remote connectivity enhancements. “Advancements in media quality can enrich relationships and facilitate collaborative problem-solving,” Larson noted. “With a reliable internet connection, these capabilities became accessible to everyone, showcasing Skype’s revolutionary impact.”
