Skype was once the pioneer of global online voice calls, but it has gradually declined in the wave of mobile Internet and cloud computing. On Friday, Microsoft announced that Skype will officially bid farewell to the stage of history and will go offline on May 5. Microsoft encourages users to switch to its free app Teams. Skype, which once took the world by storm and changed the way people communicate, ultimately failed to withstand the tide of the times.
Microsoft announced on Friday that the 21-year-old calling and messaging service will officially shut down on May 5 and encouraged users to switch to Microsoft's free app Teams.
Jeff Teper, President of Microsoft 365 Collaboration Applications and Platforms, said:
"We've learned a lot from Skype over the years and brought those learnings into Teams. We've continued to improve Teams over the past seven to eight years, but we believe now is the time to simplify the market and user experience. By focusing on Teams, we can launch more innovative features faster."
Microsoft said that in the next few days, users will be able to log in to Teams directly using their Skype account. Skype contacts and chat history will be automatically transferred there, and users can also choose to export Skype data. At the same time, the company will stop selling Skype subscription services, but users’ recharged balances can still be used in Teams.
Looking back at the history of Skype, it was once a pioneer in global online voice calls and influenced the way a generation communicates. However, it has gradually declined in the wave of mobile Internet and cloud computing. How did the former pioneer of global phone calls decline?
In 2003, Janus Friis and Niklas Zennström launched Skype in Estonia. They collaborated with a group of classmates with no telecommunications experience to create this Internet phone software based on VoIP (Voice over Internet Protocol). The name Skype comes from "skypeertopeer".
With the advantage of free online calls, Skype quickly took the world by storm. In 2004, the number of users exceeded 11 million; in 2005, the number of users increased to 54 million, and annual revenue is expected to reach US$60 million. This astonishing growth attracted the attention of eBay, which eventually acquired it for $2.6 billion.
At that time, eBay planned to allow buyers and sellers to communicate directly through Skype, increase the transaction rate of high-priced goods, and make profits through the call function. At the same time, Skype users around the world would also have access to eBay and PayPal. Under eBay's management, there are more and more Skype users, exceeding 405 million in 2008, and communication business revenue has also increased.
However, with the outbreak of the global financial crisis in 2008, eBay's performance experienced negative growth and its stock price fell to its lowest point since 2001.
In 2009, eBay's new CEO John Donahoe believed that Skype had not brought significant benefits to eBay's core business, so he decided to spin it off and plan to list it through an IPO (initial public offering). However, four and a half months after announcing its IPO plan, eBay changed its tune and announced that it would sell Skype to an investment group led by Silver Lake for US$2.75 billion, but still retained a 30% stake.
Investment groups also tried to take Skype public, but ultimately failed. Until 2011, when Microsoft acquired Skype for $8.5 billion, eBay earned more than $2 billion in return. At the time of the acquisition, Skype's monthly active users had reached 170 million. Microsoft CEO Steve Ballmer believed that cooperation between Microsoft and Skype could provide hundreds of millions or even billions of users with new and interesting ways to communicate. He also planned to integrate Skype with multiple Microsoft products.
However, Skype did not achieve its goal of 1 billion active users. With the rise of the mobile Internet, major changes have taken place in the way users communicate: Apple iMessage and FaceTime became popular on iOS devices. In 2014, Facebook acquired WhatsApp and launched a cross-border calling function. Tencent WeChat is also expanding globally.
Faced with competition, Skype has carried out multiple interface redesigns, but has been criticized by loyal users. At the same time, Microsoft opened a new battlefield and launched Microsoft Teams in 2016. It was positioned as an enterprise-level collaboration tool and deeply integrated with Office productivity software, directly challenging the emerging competitor Slack at the time.
During the epidemic, the demand for remote working and online learning surged, and a large number of users needed to use video calls. Although the use of Skype has increased, people prefer to use Zoom, and Cisco, Facebook and Google also have video services. In addition, Microsoft has focused its main focus on Teams. As a result, there are more and more Teams users, with the number of users exceeding 320 million in 2023. In contrast, Skype's daily active users dropped from 40 million in March 2020 to 36 million in 2023, and it is no longer the mainstream of the market.
Microsoft CEO Satya Nadella has never mentioned Skype in an earnings call since 2017, and the product's status has been marginalized.
Faced with the strong growth of Teams, Microsoft finally decided to abandon Skype and officially shut down the service on May 5. Users can transfer to Teams and keep their original contacts and chat history.
Microsoft executive Jeff Teper said when reviewing the history of Skype:
"If we look back at the development of Skype, an important landmark change is the rise of mobile and cloud, which have profoundly changed the communications industry."