Microsoft to discontinue Skype, Teams takes over as primary videoconferencing platform

Microsoft is shutting down Skype, the video-calling service it acquired for $8.5 billion in 2011, which helped inspire a shift in how people interact online.

The software behemoth said Friday that it will discontinue Skype in May and migrate some of its services to Microsoft Teams, its flagship videoconferencing and collaboration applications platform. Skype users may log into Teams using their current accounts.

Microsoft has always prioritised Teams above Skype, and the decision to fold the brand underlines the company’s ambition to simplify its main communications software in the face of several competitors.

Skype was founded in 2003 by a group of engineers in Tallinn, Estonia, and was a pioneer in making phone conversations via the internet rather than landlines. It used VOIP, or voice over internet protocol, which turns audio into a digital signal that can be delivered over the internet. Skype launched video calling when eBay acquired the business 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.”