Microsoft to shut Skype 14 years after it bought the iconic internet calling and chat service for $8.5 billion: 10 things you need to know

After almost 14 years, Microsoft will be closing Skype, the once-widely-used internet telephony and chat platform it purchased for $8.5 billion in 2011, as per a report. Skype, which was once a household name for free calls across the globe, has been eclipsed by newer messaging apps and tools, and Microsoft is now putting all its focus on its more successful product, Teams, reported Bloomberg. Here is what you should know about Skype's demise and legacy:

1. Skype is closing down in may 2025

With years of dwindling usage, Microsoft has finally decided to phase out Skype, marking the demise of an era for the legendary service, as per reports. Skype will be formally closed down in May 2025.

2. Skype lost popularity with the emergence of competitors

After its reign at internet calls, Skype has gradually lost relevance as new channels such as WhatsApp, Zoom, and Slack gained traction, providing more dynamic modes of communication.

3. Teams becomes Microsoft's new focus

Instead of keeping Skype alive, Microsoft is doubling its bet on Teams, its collaboration tool that combines chat, voice, and video calling, reported Bloomberg. Teams has since risen to prominence in the corporate world and is now regarded as Microsoft's go-to communications service.

4. Skype's downfall: 300 million to 36 million

Skype had over 300 million monthly active users in 2016, but in 2023 that figure had dropped drastically to only 36 million daily users, as per Bloomberg. Teams, on the other hand, has exploded with 320 million monthly users.

5. The $8.5 billion Skype acquisitions in 2011

In 2011, Microsoft took a gamble, buying Skype for $8.5 billion, with the hope of riding its internet calling dominance, as per Bloomberg. It was Microsoft's biggest acquisition at that time.

6. Skype found it difficult to compete with newer apps

Skype was not able to match the newer applications such as Telegram, Snapchat, and WhatsApp, as per reports.

7. Corporate push: Skype for Business vs. Slack

Microsoft tried to establish Skype as a workplace player with Skype for Business, but it couldn't match Slack's interface, reported Bloomberg. Teams, released later, became the go-to workplace communication platform, as per the report.

8. Constant redesigns and reliability problems

Skype users had started complaining about reliability problems, including missed calls and device syncing issues. Even constant redesigns and an attempt to mimic Snapchat, drove away many users, reported Bloomberg.

9. Microsoft to Relocate Skype Staff, Not Fire Them

Although Skype is being phased out, Microsoft assured that no workers will be losing their jobs. Employees who were assigned to Skype will be relocated to other departments within the company, reported Bloomberg.

10. Skype's role in Microsoft's AI initiatives

Skype was once Microsoft's most ambitious AI effort, such as its real-time translation feature. Microsoft will keep building AI tools in Teams as part of its plan to be at the forefront of workplace communication.

FAQs

Why is Microsoft shutting down Skype?
Skype is being shut down because its usage has significantly decreased over the years.

What is Microsoft's priority now?
Microsoft is currently concentrating on Teams. It is a software that combines chat, voice, and video calls and is largely utilized by businesses.