Microsoft is shutting down Skype after buying it 14 years ago for $8.5 billion

Microsoft is pulling the plug on Skype, the pioneering Internet telecommunications and video call platform it bought nearly 14 years ago for $8.5 billion. 

“We will be retiring Skype in May 2025 to focus on Microsoft Teams (free), our modern communications and collaboration hub,” already used by hundreds of millions of people at work, school and home,” Jeff Teper, president of collaborative apps and platforms at the Redmond, Washington-based software company, said on Friday in a statement. 

Microsoft in late 2012 scrapped its own instant-messaging tool, Messenger, after buying Skype the prior year. But in the more than decade since, services including FaceTime, Messenger and WhatsApp have let people connect in ways that made it difficult for Skype to compete. 

The difficulties were illustrated in particular during the early days of the Covid-19 pandemic that saw people stuck at home flocking to Zoom. Microsoft launched Teams for consumers in 2020, while saying at the time it remained committed to Skype.

Skype was launched in 2003 by entrepreneurs Niklas Zennstrom and Janus Friis, with the company’s name combining “Sky” with a reference to peer-to-peer networks, the technology that during the dotcom boom became an important new way for sharing online files and data. 

The company’s founders first sold Skype to eBay in 2005 for $2.6 billion. Microsoft’s acquisition in May of 2011, at the time the biggest ever purchase for the software maker, gave it access to a user base of about 170 million people who logged in to Skype each month. That count morphed to more than 300 million monthly users by 2016, but had shriveled to 36 million in 2023, Microsoft said.

Those now using Skype will have time to log in to the Microsoft Teams app and have their message history, group chats and contacts available without having to create an additional account, according to Microsoft. Users can also opt to export their data to another app.

Skype will be available until May 5, giving users about two months to decide which option they want to take.