Microsoft is shutting down Skype after a 21-year run. Here's how it lost out to video call rivals

Core Insights - Microsoft announced the shutdown of Skype, a 21-year-old calling and messaging service, effective May 5, encouraging users to transition to its Teams app [2][3] - Skype, once a pioneer in online communication, struggled to adapt in the mobile era and did not see significant growth during the pandemic [2][14] - Microsoft aims to streamline its offerings and enhance innovation by focusing on Teams, which has surpassed 320 million users in 2023 [3][14] Company History - Skype was launched in 2003 by Janus Friis and Niklas Zennström, initially allowing free online calls [5] - By 2004, Skype had 11 million registered users, and by 2005, this number grew to 54 million, with anticipated annual revenue of $60 million [6] - eBay acquired Skype for $2.6 billion in 2005, but the integration did not yield the expected benefits, leading to a sale to an investor group in 2009 for $2.75 billion [10] User Growth and Challenges - Under eBay, Skype's user base grew to over 405 million by 2008, but the company faced challenges after leadership changes [8][9] - Microsoft acquired Skype in 2011 for $8.5 billion, integrating it with various Microsoft products [11] - Despite initial success, Skype never reached a billion active users, facing stiff competition from services like WhatsApp and WeChat [12][14] Recent Developments - Skype's daily active users fell from 40 million in March 2020 to 36 million in 2023, indicating a decline in relevance [15] - Microsoft has not mentioned Skype in earnings calls since 2017, reflecting a strategic shift towards Teams [15]