Do you remember your Skype password? I bet you don’t. You may not even remember if you have a Skype account in your name.

How Skype’s rise to fame revolutionized internet calls

If you’re a Gen Z, Millennial, or Gen X, chances are you have had a Skype account at some point. Launched in 2003, Skype became globally recognised for pioneering voice and video calls over the internet. The app grew rapidly, offering cheaper—or even free—calls at a time when international calling was prohibitively expensive.

Skype was founded by Scandinavian entrepreneurs Niklas Zennström and Janus Friis, who teamed up with four Estonian tech developers and former schoolmates: Jaan Tallinn, Priit Kasesalu, Toivo Annus, and Ahti Heinla.

Two years after its launch, Skype was acquired by eBay, the e-commerce giant, for $2.6 billion (KSh 335.8 billion). At the time, Meg Whitman—who served as the U.S. ambassador to Kenya between 2022 and 2024—was eBay’s president and CEO. In 2009, eBay sold off the majority of its stake to private equity firm Silver Lake.

Black tax: My mom says she’ll curse me if I don’t send her money yet I’m broke, what should I do?

About six years later, in 2011, tech giant Microsoft acquired Skype for a whopping $8.5 billion (currently equivalent to KSh 1.097 trillion), marking the beginning of Skype’s journey under Microsoft.

Fast forward nearly two decades, and Microsoft has now announced that Skype will be shut down in May 2025.

“Starting in May 2025, Skype will no longer be available. Over the coming days, you can sign in to Microsoft Teams Free with your Skype account to stay connected with all your chats and contacts. Thank you for being part of Skype,” read Microsoft’s post on X.

So, what led to Skype’s downfall? Why is Microsoft moving forward with Teams while bidding goodbye to Skype? According to the Google Play Store, Skype has had over 1 billion downloads as of Monday, March 1, 2025.

Bizna Kenya confirmed that the app was still downloadable as of March 1, and new users could still sign up.

The web platform was also accessible, but there was a disclaimer on the home page.

“Goodbye Skype, Hello Teams. Skype is retiring in May 2025. Beginning March 2025, you will be able to sign into Microsoft Teams Free with your Skype credentials, and your chats and contacts will be right there ready for you. Enjoy the features you love about Skype, including free calling and messaging, as well as new features like meetings and communities, all on Teams app,” the message read.

To understand where things went wrong, let’s go back to when eBay first acquired Skype. At the time, Meg Whitman faced opposition from some investors and analysts who argued that eBay had overpaid for the platform. However, she strongly defended the decision.

“What we bought was the leader in voice communications in every country of the world. We think we bought a tremendous business in addition to some really interesting synergies with PayPal and eBay. And as a result, we feel like we paid a fair price,” she stated in a CNBC interview.

However, when John Donahoe took over as eBay’s CEO in 2008, he was quick to declare that Skype had no synergies with eBay’s core business. “Skype had no synergies with eBay’s other businesses,” he stated, signaling his intent to offload the platform.

By the time eBay sold Skype, it had amassed over 200 million users. By 2024, Skype had around 300 million active users. In contrast, WhatsApp—launched in 2009—had surpassed 2 billion active users, highlighting the intense competition Skype was up against.

I use kipande soap in my washing machine, is it worth the risk?

Under Silver Lake’s ownership, Skype attracted interest from major businesses and investors. In 2011, when Microsoft acquired it, Facebook and Google were also rumored to have been interested.

According to Om Malik, founder and tech writer at GigaOm, Skype’s decline became evident under Microsoft’s leadership, particularly during Steve Ballmer’s tenure as CEO (2000–2014). At the time, Skype’s CEO was Tony Bates (2010–2014).

“They failed to capitalize on Skype 100%. Steve Ballmer was the king of buying things and not knowing what to do with them. What happened with Skype is the story of every large company with a lot of middle management. They didn’t innovate on the product for a very long time. Tony Bates can say whatever he wants, but the reality is that the whole thing blew up on his watch,” Malik said in a CNBC interview.

Malik added that Skype became too complicated and slow, making it less attractive to users.

“Skype’s missteps allowed WhatsApp to grow and become this big,” he noted.

In 2017, Microsoft launched Teams—a move that effectively put Skype in direct competition with another Microsoft-owned platform. Teams introduced features that Skype lacked, positioning itself as a more versatile communication tool.

Microsoft’s introduction of Teams was largely a response to the rise of other platforms like Slack, which offered enhanced team collaboration features.

How WhatsApp, Zoom and Teams took over

Then came the COVID-19 pandemic in 2020, which triggered a surge in video conferencing. While Skype existed, it was notably absent from the list of top choices. Governments, businesses, and individuals gravitated toward Zoom, Microsoft Teams, and Google Meet, with only a few opting for Skype.

Despite its struggles, Skype had built a solid reputation. It was even used at the White House as a platform for journalists to ask questions remotely.

In Kenya, TV stations also relied on Skype for virtual interviews with guests both locally and internationally.

Some industry observers believe that Microsoft introduced Teams as a strategic way to phase out Skype gradually.

According to Jeff Teper, Microsoft’s President of Collaborative Apps and Platforms, the decision to retire Skype was aimed at “streamlining our free consumer communication.”

In a message shared on February 28, Teper assured Skype users that they would be able to transition to Teams using their existing Skype login credentials.

“During the transition period, Teams users can call and chat with Skype users, and Skype users can do the same with Teams users. This helps ensure you can stay connected with everyone, regardless of the platform you’re using during this transition,” Microsoft stated in its blog post.

Where are Skype’s founders now?

Ahti Heinla is now the CTO and co-founder of Starship Technologies, a company he launched with fellow Skype co-founder Janus Friis. Starship specializes in autonomous robot delivery and has completed millions of deliveries across 50 locations worldwide.

Niklas Zennström leads Atomico, a venture capital firm, while Jaan Tallinn dedicates much of his time to discussions on the dangers of unchecked AI development.

Tallinn, a founding engineer at Skype, also co-founded the Centre for the Study of Existential Risk at the University of Cambridge.

Skype’s shutdown rekindles memories of Windows Phone (WP), Microsoft’s ill-fated mobile operating system. The Windows Phone was intended to replace Windows Mobile and Zune but ultimately failed to compete with iOS and Android, leading to its discontinuation.

Skype being retired, is a sign of yet another chapter of a Microsoft product that once had massive potential but ultimately couldn’t keep up with the times.