Let’s talk about the rise and fall of Skype

Skype, the voice, video and instant messaging app that became wildly popular in the early 2000s, allowing people to talk to friends and family without paying long-distance charges, was acquired by eBay in 2005. However, the deal didn't go as planned, and an investment group led by Silver Lake acquired a majority stake in the company. Microsoft then stepped in and bought the company for $8.5 billion in 2011.

Even with the backing of the world’s largest software company, Skype is suffering from obsolescence as consumers and businesses turn to tools like Zoom and Meta’s WhatsApp during the pandemic, with plenty of options now available for quickly connecting with groups of friends and colleagues via smartphones.

"Skype is still primarily viewed as a one-to-one service," Jim Gaynor, vice president of research at consulting firm Directions on Microsoft, said in an interview.

Microsoft has promoted Skype on Outlook and Windows, and even enriched the app with Bing-generated AI chatbots, but the numbers still don’t look good.

Skype had 40 million daily active users in March 2020, a Microsoft spokesperson said, a number that has since slipped to 36 million. In contrast, Microsoft's newer Teams communications app has grown in popularity, rising from nearly 250 million users in July 2021 to a record high of more than 300 million users in the first quarter.

Jaan Tallinn, one of Skype's founding engineers, said that although he has been away from Skype for more than a decade, Skype is still his default choice for making calls. "But if the person I'm contacting wants to use another channel, I'm happy to accommodate that," he said.

It's unclear how long Skype will be around, but it's not going anywhere. A Microsoft spokesperson responded in an email: "Skype will continue to be a great choice for people who love Skype and want to connect through messaging, audio and video calls, and Bing chat."