Microsoft blew $8.5 billion on Skype and spent years killing it

Skype will officially stop service in May 2025, but its real decline began after being acquired by Microsoft in 2011 and has experienced a long and slow demise since then.

You may have forgotten the existence of Skype, and in a few weeks it will completely disappear. Once upon a time, the revolutionary app offered free voice calls over the internet, and its importance and value allowed eBay to acquire it for $2.6 billion in 2006.

eBay's acquisition of Skype seems a bit incredible, but the auction site does make a lot of money—in 2011, it reselled Skype at a high price. Five years later, Microsoft finally bought it for $8.5 billion.

Thereafter, Microsoft's actions directly pushed Skype to the road to death. We may never know the truth, but it seems that the fact that Skype is not an internal product of Microsoft is the root of the problem.

For a company that acquired DOS and (ahem) inspired by Apple to create Windows, Microsoft sometimes adheres to the strong "not created by me". So Skype immediately brought huge influence to Microsoft in the field of conference technology, but that wasn't enough.

What Microsoft seems to want is its own build, and eventually, it also gets it.

For a while, Skype was still an app that everyone was using. Our editor-in-chief Mike Wothel interviewed me through Skype more than a decade ago. In preparing for this article, he also mentioned that he used to play tabletop games through Skype. The podcast also used it early on, with individual hosts recording audio separately for the best sound quality, which is very similar to today’s FaceTime or Riverside.

However, Skype was marginalized five years after the acquisition, when Microsoft launched Teams in 2016. Unofficially, Teams replaced the old, cumbersome and unreliable Skype app.

The official rules are completely different, and Microsoft Teams is obviously a completely different cumbersome and unreliable service. Despite Teams' many problems that continue to date, Microsoft aims to attract markets that are willing to pay for stable and reliable chat, voice and video services.

However, just aiming at this market, Microsoft has already suggested that Skype will not work properly and is not worth paying for use. Skype has suffered a reputation as its owner and despite occasional updates, it hasn't received any attention.

"Skype has pioneered online audio and video calls for many people," Microsoft's Jeff Turper told CNBC when announcing Skype's discontinuation of service. “Over the years, we have learned a lot from Skype and incorporated that experience into Teams and have been constantly improving Teams over the past seven to eight years.”

"But we feel it's time because we can provide a simpler service to the market, to our customer base," Tepper continued. "And, just focus on Teams, we can achieve more innovation faster."

"This is obviously a very important moment for us," he said. "We are of course very grateful to Skype for its contribution in many aspects."

Skype is a transformative application that helps the Internet become an ubiquitous necessity today. But Microsoft's slow exploitation of Skype to build Teams is cruel.

This is also a bit ineffective. In the past, Skype was an amazing new internet application, but actually attracted only a small number of specific users. Teams didn't amaze anyone.

But Zoom did it.

Skype disappeared during the epidemic, and Teams performed well in universities and businesses. But Zoom is rapidly gaining popularity among ordinary users, even if it has problems on its own, but once ordinary users come into contact with Zoom, they will stick to it.

Microsoft should dominate the video conferencing market during the epidemic. Microsoft should continue to develop Skype, or shut it down in 2016, leaving only Teams.

By the way, Apple should also make FaceTime the open source standard that Steve Jobs said when he released it with the iPhone 4 in 2010.

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