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Bye-bye Skype: the rise and fall of the app that brought video calls to the masses
In May 2025, Microsoft announced it was shutting down Skype, the VoIP and instant messaging app that forever changed how we communicate online. The news was met with surprise and sadness by loyal users who stuck by the platform over the years, despite the arrival of bigger and better competitors.
Launched in 2003 by a team of developers led by Niklas Zennström and Janus Friis, Skype had instant appeal as a simple, reliable and free video-call service in an era when the nascent technology still had a whiff of sci-fi about it and international phone calls were exorbitantly expensive.
But in recent years, the platform struggled in the face of fierce competition from more advanced rivals. In 2020, after various abortive relaunches and the arrival of the Covid-19 pandemic, Microsoft – who bought Skype in 2011 – decided to focus their investment in the Teams app, seen as better suited to the remote working needs of schools and businesses.
So why did this noughties unicorn, which boasted 300 million active monthly users in 2013, slide into precipitous decline? To explain, we need to tell the story of Skype, from its origins as a wildly successful Scandinavian start-up to two ill-fated acquisitions by American tech giants and the service’s eventual demise.
A revolution in global communication
Skype’s founding duo, Swede Niklas Zennström and Dane Janus Friis, set out with a clear vision: to provide free, reliable and secure calls over the Internet. To do so, the pair took the peer-to-peer protocol behind KaZaA, the file-sharing application they had already created, and hired a team of Estonian developers to turn it into an Internet phone service. Skype launched officially in August 2003 to instant success: it racked up more than 10,000 downloads on the first day and hit over 10 million registered users a year later. By the end of 2010, it had north of 660 million users and in 2014 it accounted for roughly 40% of the world’s international calls.
The platform’s launch marked an epochal shift in the telecoms sector: by using VoIP (voice over internet protocol) technology, Skype let people make free online video calls and cheap international calls to landlines and mobiles. This innovation shrank the world by facilitating communication between countries and continents, both for users at home and at work.
The birth of Skype also paved the way for widespread adoption of VoIP telephony, a simple, reliable and powerful system that broke the monopoly of legacy telecoms operators by promising low-cost calls to anyone with an Internet connection.
The acquisitions by eBay and Microsoft
Skype’s success turned heads in Silicon Valley, and suitors soon began courting the founders. eBay eventually bought the company in 2005 for $2.6 billion, with the intention of integrating Skype into the auction platform to streamline communication between buyers and sellers. But the experiment failed, and in 2011 eBay sold Skype to Microsoft for $8.5 billion. Bill Gates’s firm also had ambitious plans for the platform: it wanted to build Skype into Microsoft’s suite of products and make it the main communication channel in the company’s ecosystem, replacing Windows Live Messenger.
Microsoft lost no time in rolling out new features: there was Skype Meetings for holding videoconferences with up to 100 participants; Skype Translator for interpreting voice conversations and translating text messages in real time with the help of AI; and Skype Out for calling landline and mobile numbers at competitive prices. The ability to send text messages to all mobile operators was also added, as was an enterprise version of the app, Skype for Business.
There was even Skype TX for Broadcasters, which was specifically designed to help TV stations manage multiple video calls at once and guarantee better quality than the consumer version of the software.
The decline
Despite Microsoft’s best efforts to offer new functionalities and make the platform more scalable and better performing, Skype suffered from a series of critical weaknesses that it never fully overcame. Its multiple versions, instability on mobile devices, worsening usability and growing cost of calls to traditional numbers meant Skype struggled to keep up as new competitors entered the market, like FaceTime, WhatsApp, Google Hangouts (now Meet) and Zoom.
The Covid-19 pandemic accelerated the platform’s decline. With the whole world locked down at home, the fight to dominate the video call market intensified. Microsoft decided to go all in on Teams, Office 365’s built-in videoconferencing app that offered advanced remote working features. Within a few short years, Teams would become Microsoft’s flagship tool for communication and collaboration in business and educational settings. From 2021 onwards, the company stopped developing new features for Skype, providing support only, before officially announcing in February 2025 that the app would be retired in May that year.
Cultural impact
Skype democratised video calls, revolutionising the way we communicate to such an extent so that “to skype” became a verb in many languages. Thanks to the platform, millions of couples, families and workers discovered they could make geographical distance meaningless in a click.
The app was one of the first to be adopted for remote learning, opening up online lessons and tutoring to many, wherever they were in the world, and promoting education and cultural exchange between countries.
But perhaps most importantly, Skype introduced many of us to features we now take for granted in communication apps, like VoIP calls, chats, screen sharing and collaboration on shared documents. This prepared us for work and school under lockdown when Covid struck, as well as the smart working boom that followed.
For years, Skype was the go-to app for couples in long-distance relationships, families scattered to the wind and professionals working remotely. Which is why many will greet news of its passing with perhaps a tinge of sadness and a touch of nostalgia.