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Microsoft has hanging out with the pioneering internet communications that closed its Skype video call service 14 years after buying the company for $8.5 billion, covering the telecom industry and paving the way for WhatsApp and Zoom.
Seattle-based Microsoft said on Friday that it would leave its service in May and will begin moving customers to free versions of its comparable team application.
“Skype has been an integral part of shaping modern communication and supporting countless meaningful moments,” said Jeff Teper, president of Microsoft 365’s co-apps and platforms.
Teper added that the company understands this move will be difficult for some customers.
Skype is a pioneer in producing internet phones and video calls anywhere in the world, an innovation that explodes the lucrative business model of charging the high fees of the telecommunications industry with international phones.
Microsoft’s decision to close Skype comes seven years after the release of the Teams Chat and Group Video Calling Application, which offers many of the same features as Skype.
The business has struggled to compete with startups like WhatsApp, Telegram and WeChat, but fell on the roadside during the Covid-19 pandemic when Zoom and others were able to take advantage of the boom in demand for video conferencing services.
Skype was founded in Luxembourg in 2003 by Niklas Zennström and Janus Friis. The technology was condemned in the early 2000s for promoting copyright in music and films, resulting in a chaotic world of peer-to-peer file sharing.
Riding the wave of early broadband adoption, the startup quickly attracted tens of millions of users.
Skype was acquired by e-commerce platform eBay in 2005 for $2.6 billion in a deal that reignited Silicon Valley’s blockbuster deal-making for consumer internet companies following a long hangover after the Dotcom bust.
But two years later, eBay won a $1.4 billion prize on the investment, based on the basis that the acquisition did not run as expected.
In 2009, a consortium of investors, including Andreessen Horowitz and Silver Lake, was acquired by the company before Microsoft acquired the company in 2011.
Former Microsoft CEO Steve Ballmer described the 2011 deal as a “huge opportunity” for a company offering services that spanned voice and video calls. “Together, Microsoft and Skype define this future and what it really looks like,” he said.
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Microsoft has gradually cut Skype’s services since launching its team and canceling Skype for Skype’s business in 2017.
Late last year, Microsoft said it would stop allowing customers to add credits to their accounts and push them to use monthly subscriptions instead.
Skype had over 330 million users in 2023, and last reported these figures, falling from its 300mn peak in 2016. He won the business when he had 30 million customers.
Microsoft said it could migrate Skype customers to a team and sign in to the service using current credentials. You can also export chat, contacts, and other data and call history if you don’t want to use the service.
Paid Skype subscription users can use their credits until the end of their next renewal period.
