Skype to shut down in May, Microsoft says

Skype will ring for the last time on May 5 as owner Microsoft retires the two-decade-old internet calling service that redefined how people connect across borders.

Shutting down Skype will help Microsoft focus on its homegrown Teams service by simplifying its communication offerings, the software giant said on Friday.

Founded in 2003, Skype's audio and video calls quickly disrupted the landline industry in the early 2000s and made the company a household name boasting hundreds of millions of users at its peak. But the platform has struggled to keep up in the face of competitors that include Zoom, Meta's WhatsApp, Salesforce's Slack and WeChat from Tencent in recent years.

The decline was partly because Skype's underlying technology was not suited for the smartphone era.

When the pandemic and work-from-home fuelled the need for online business calls, Microsoft batted for Teams by aggressively integrating it with other Office apps to tap corporate users, who were once a major base for Skype.

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Monthly average users plummeted

To ease the transition from the platform, its users will be able to log in to Teams for free on any supported device using their existing credentials, with chats and contacts migrating automatically.

Other big tech firms have also struggled with online communication tools, with Google making several attempts through apps including Hangouts and Duo.

Microsoft declined to share the latest user figures for Skype and said there would be no job cuts due to the move. It added that Teams has about 320 million monthly active users.

When Microsoft bought Skype in 2011 for $8.5 billion US after outbidding Google and Facebook — its largest deal at the time — the service had around 150 million monthly users. By 2020, that number had fallen to roughly 23 million, despite a brief resurgence during the pandemic.

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Microsoft said on Friday, "Skype has been an integral part of shaping modern communications."

"We are honoured to have been part of the journey."

Skype was founded in 2003 by Scandinavians Niklas Zennstrom and Janus Friis, who had previously created the peer-to-peer sharing site Kazaa.

Ebay paid nearly $3 billion for it two years later but then sold 65 per cent of Skype in 2009 to a consortium that included Silver Lake, the Canadian Pension Plan Investment Board and the investment firm led by Marc Andreessen, co-founder of 1990s browser Netscape.