Skype Shutting Down

After 21 Years, Microsoft Is Shutting Down Skype. It’s Truly the End of an Era

Skype never really made sense in a world where Microsoft wants everyone to use Teams.

I don’t know for sure how this sort of thing works, but I imagine there was a meeting once where someone convinced Microsoft’s CEO at the time, Steve Ballmer, to spend more than $8 billion on Skype. Yes, Skype.

At the time, it was Microsoft’s largest acquisition ever. Six years earlier, eBay had bought the company for $2.5 billion, though that deal didn’t make sense at the time, and eBay was never really able to turn it into a meaningful business. It eventually took a $1.4 billion write-off and sold a majority of the company to outside investors. Eventually, Microsoft came along and there was a meeting, and the company ended up spending a lot of money on a business no one else had ever figured out how to make work.

In 2011, when Microsoft acquired Skype, it had more than a hundred million users. I wasn’t in that meeting, but looking back, I think it’s reasonable to say that was the high water mark for what is arguably the original mainstream voice and video online communications platform. Skype managed to hang around for almost 14 more years, but today Microsoft says it is shutting it down for good.

There was a time, almost exactly five years ago, when Skype could have found its moment. When the pandemic started, and everyone suddenly had to figure out how to work remotely, video meetings became the primary way teams got together. Skype—owned by the world’s largest business software company—should have been the de facto way people communicated. Instead, it was Zoom that became the default way people did everything from school, work, family birthdays, and yoga classes.

Even Microsoft introduced a competitor to Skype. Well, really it was trying to compete with Slack when it launched Teams, but the fact that it had a video calling feature seemed weird if you also had Skype. If your entire team is already using Teams for collaboration, you really didn’t need Skype anymore.

Steve Jobs, Apple’s iconic founder and CEO, told his biographer, Walter Isaacson, that “If you don’t cannibalize yourself, someone else will.” The most famous example was the iPod, which was made obsolete by the iPhone. Eventually, someone was going to realize that a computer you carry in your pocket should do more than just play music. If that’s true, it makes sense that Apple would want to be the company that figured it out.

In one sense, the same thing is true for Microsoft. A number of companies tried to figure out ways to integrate Skype into their various products. Despite the fact that it had a powerful brand, none of them really figured it out.

I don’t know if Skype has ever been a success as a business, but it was definitely a success as a product idea. I used Skype for countless meetings, conversations with friends, and even recording podcasts. I’m old enough to feel more than a small dose of nostalgia for the days when getting on a video call seemed remarkably futuristic. Now, everyone just uses FaceTime for personal calls and Zoom or Teams or Slack for work.

When I read the announcement this morning, I couldn’t decide whether it was more surprising that Microsoft was shutting down Skype, or that it hadn’t already. Either way, it truly is the end of an era.