Microsoft is officially retiring Skype, its longstanding messaging and calling service, with operations shutting down on May 5. The tech giant now encourages users to transition to its Microsoft Teams platform, which has become the company’s priority for communication features.
Skype’s Rise and Fall
Launched in 2003 by Janus Friis and Niklas Zennström, Skype quickly gained popularity for enabling free internet-based voice and video calls. By 2005, eBay acquired Skype for $2.6 billion, intending to leverage its capabilities for buyer-seller interactions. However, the platform failed to align with eBay’s core operations, leading to a partial sale in 2009.
Eventually, in 2011, Microsoft purchased Skype for $8.5 billion, aiming for deep integration across its ecosystem, including Xbox, Windows, and enterprise tools. Initially, the service thrived, reaching over 170 million users per month.
The Shift to Mobile and New Competitors
Skype’s momentum slowed with the rise of mobile-first messaging platforms. Apple’s FaceTime and iMessage gained significant traction, while WhatsApp’s entry into the calling space after its 2014 acquisition by Facebook further diminished Skype’s relevance. Zoom also surged in popularity, particularly during the COVID-19 pandemic, becoming the preferred choice for personal and professional video calls.
Microsoft’s launch of Teams in 2016 as a collaborative workplace tool positioned the brand away from standalone consumer messaging. By 2023, Teams had over 320 million users, far exceeding Skype, which dwindled to 36 million daily active users.
Microsoft’s Strategy Moving Forward
Starting next week, Skype users will be able to sign into Teams using their existing credentials. Microsoft has also ensured that contacts and chat history will transfer over smoothly. Existing Skype credits will remain usable on Teams, but the company will discontinue selling new Skype subscriptions.
According to Microsoft, the decision was driven by the goal of simplifying its communication offerings and accelerating innovation within Teams. While Skype paved the way for internet-based calls, Microsoft believes its unified focus on Teams will provide a better user experience.
### Industry Implications
With this shift, Microsoft consolidates its products to compete better with platforms like Zoom and Slack, which dominate remote workspaces. The retirement of Skype marks the end of an era for digital communication, signaling the industry’s transition toward integrated, cloud-based collaboration tools.
Microsoft has not disclosed how many users remain on Skype today, but it is clear that the focus has entirely shifted to Teams. The company remains committed to expanding Teams’ capabilities, further innovating its workplace and consumer communication tools.
For users still reliant on Skype, Microsoft encourages migration and data exporting before the official shutdown in May.
