NEW YORK, March 1: Microsoft has announced the shutdown of Skype, the internet-based phone and video service that once dominated global communication. Starting May 5, 2025, Skype will no longer be available, and users will be directed to migrate their log-in credentials to Microsoft Teams’ free tier. This decision marks the end of an era for Skype, which was acquired by Microsoft in 2011 for $8.5 billion, the company’s largest acquisition at the time. Over the years, Skype was integrated into other Microsoft products, including Office and the failed Windows Phone operating system.

"Skype has been an integral part of shaping modern communications and supporting countless meaningful moments, and we are honored to have been part of the journey," said Jeff Teper, President of Microsoft 365 collaborative apps and platforms, in a blog post. He expressed excitement about the opportunities Teams offers and reaffirmed Microsoft's commitment to helping users stay connected in new ways.

Despite its early success, Skype’s popularity has significantly waned in recent years. While the service briefly experienced a surge in usage during the COVID-19 pandemic, it has faced increasing competition from platforms like Zoom, WhatsApp, FaceTime, and especially Microsoft’s own Teams. Skype was originally launched in 2003 in Estonia, allowing users to make free calls worldwide. It quickly became a popular alternative to traditional, expensive international calling services. In 2005, eBay acquired Skype for $2.6 billion, but after a failed partnership, eBay sold its 65% stake in the service in 2009 to an investor group, and Microsoft later acquired it in 2011.

The decision to shut down Skype comes 14 years after Microsoft purchased the service, which was once a major force in internet communications. The shutdown signals Microsoft’s intensified focus on Teams, which has rapidly grown both in business and consumer markets. "We know this is a big deal for our Skype users, and we’re very grateful for their support of Skype and all the learnings that have factored into Teams over the last seven years," Teper told TechCrunch. "At this point, putting all our focus behind Teams will let us give a simpler message and drive faster innovation."

As of early 2023, Skype had approximately 36 million active users, a far cry from its peak of 300 million in 2013. Microsoft has urged Skype users to transition to Teams, offering them the option to migrate their contacts and chat data to the new platform. Users who prefer can also export their data using Skype's built-in export tool.

Skype’s decline has been gradual, especially after the launch of Microsoft Teams in 2016. Teams, initially aimed at businesses, evolved to integrate communication tools such as chat, video calls, and file-sharing, creating a direct overlap with Skype's services. In 2017, Microsoft announced plans to phase out Skype for Business, and by 2021, Teams had become the preferred communication tool for Windows 11. As Teams grew, Skype was increasingly sidelined.

By December 2024, Microsoft stopped allowing users to add credit to their Skype accounts or purchase Skype phone numbers. Instead, it moved users to monthly subscriptions and Skype-to-phone plans. "Skype took a bump — as did Teams — during the pandemic, and Skype has largely been stable in the last couple of years," Teper said. "And we felt the time, and the feedback, was such that we could make the move." In that same period, Teams experienced a fourfold increase in consumer calling minutes.

Despite Microsoft’s investment in Teams, Skype's steady decline in usage meant the company was ready to consolidate its efforts on the more popular platform. "It’s at a high enough scale that we feel great about the app [Teams] for personal use," Teper explained. "We feel we have the mileage under our belt on the adoption by consumers, [who are] using Teams in their personal lives."

While Skype pioneered internet-based communication, its usage has been overtaken by newer technologies and messaging platforms. By 2020, WhatsApp surpassed 2 billion users, and Skype’s numbers dwindled significantly. When Skype filed for an IPO in 2010, it reported 560 million registered users and 124 million active monthly users. In 2020, Microsoft announced that Skype had grown 70% month-on-month to 40 million daily users during the pandemic, but that boost was short-lived compared to competitors like Zoom.

Microsoft has encouraged users to transition to Teams Free, which retains some Skype features such as chat and video calls but lacks the ability to call mobile and landline numbers—a key Skype feature. Subscription renewals for Skype will end on April 3, 2025. For those with remaining Skype credit, Microsoft will make the Skype Dial Pad available both in the Skype web portal and in Teams until further notice. "We’ll support [this] as long as users have credit and they’re using this functionality," said Amit Fulay, Microsoft VP of product.

Despite offering phone-call functionality in its enterprise version, Fulay confirmed that Teams Free would not support PSTN (Public Switched Telephone Network) services due to changes in consumer usage patterns. "We’ve been looking at usage of telephony for a while on Skype, and patterns have changed, usage has changed, and this is a step towards that," he explained.

During the transition, Skype users can log into Teams with their Skype credentials, automatically transferring all contacts and chats. Skype will remain functional until May 5, 2025, but users who do not migrate by that date will see their data retained until the end of the year before being deleted.

The end of Skype marks the blurring of lines between business and consumer communication tools. Just as Skype began as a consumer product that expanded into business use, Teams has now made the reverse journey. "I think a lot of people will make the transition [from Skype to Teams]," Teper said. "If you think about Word, Excel, PowerPoint, those are brands that work for business and personal use for people. We have kids and parents doing their homework in Word, and budgets in Excel, so we have good precedent about our tools being used in personal and work life."

As Skype fades into history, Microsoft’s focus on Teams represents a new phase in its vision for connected communication tools that bridge both personal and professional realms. The shift signals a new chapter for Microsoft’s collaboration platforms, as Teams is set to dominate the communication landscape moving forward.