Microsoft is shutting down Skype after a 21-year run. Here’s how it lost out to video call rivals
Kelly Harris of San Jose, leans over to kiss the web cam as she says her goodbye to Brian Johnson, her brother stationed in Japan, at the end of their video phone call via Skype in San Jose, Calif. on Nov. 25, 2009.
Lea Suzuki | San Francisco Chronicle | Hearst Newspapers | Getty Images
Skype is logging off.
On Friday, Microsoft announced that the 21-year-old calling and messaging service will shut down May 5. The software company is encouraging Skype users to migrate to its free Teams app.
Skype won attention in the 2000s for giving people a way to talk without paying the phone company, but stumbled in the mobile era and didn’t enjoy a major resurgence during the pandemic. Some people have forgotten that it’s still available, given the many other options for chatting and calling.
“We’ve learned a lot from Skype over the years that we’ve put into Teams as we’ve evolved teams over the last seven to eight years,” Jeff Teper, president of Microsoft 365 collaborative apps and platforms, said in an interview with CNBC. “But we felt like now is the time because we can be simpler for the market, for our customer base, and we can deliver more innovation faster just by being focused on Teams.”
Over the next few days, Microsoft will start allowing people to sign in to Teams with Skype credentials, and Skype contacts and chats will transfer over, according to a blog post. People can also export their Skype data. The company will stop selling monthly Skype subscriptions, and users with credits can keep using them in Teams.
“This is obviously a big, big moment for us, and we’re certainly very grateful in many ways,” Teper said. “Skype pioneered audio and video calling on the web for many, many people.”
It’s one of the most enduring digital brands.
In 2003, Janus Friis and Niklas Zennström, who previously co-founded peer-to-peer file-sharing program Kazaa, launched Skype in Estonia with help from a band of former classmates with zero experience in telecommunications. Originally, Skype was a tool for people to call one another online for free. The quirky name stood for “sky peer to peer,” a reference to the service’s underlying voice over internet protocol, or VoIP, architecture.
Skype caught on quickly. By 2004, there were 11 million registered users. By the time eBay announced a plan to buy Skype Technologies SA for $2.6 billion in 2005, the user count had reached 54 million, and Skype was anticipating $60 million in annual revenue, thanks to payments from those who wished to call mobile phones and landlines.
Meg Whitman, eBay’s CEO at the time, envisioned that Skype would help people more quickly complete sales of products, especially costly ones, by connecting buyers and sellers. And eBay could charge extra for such calls. Skype users across the world could discover eBay and PayPal, too. The deal was completed 29 days later.
In this handout image provided by eBay, the company’s president and CEO, Meg Whitman, left, poses with Niklas Zennstrom, co-founder and CEO of Skype, the global Internet communications company, in London on Sept. 12, 2005. Internet company eBay today announced its intention to acquire Skype, a voice over internet company, for about $2.6 billion.
Sergio Dionisio | eBay | Getty Images
Under eBay, Skype’s user number grew, crossing 405 million by 2008, and communications revenue rose. But then Whitman stepped down as CEO, making way for former Bain executive John Donahoe, who didn’t think eBay’s core businesses were benefiting from the Skype transaction.
In 2009, the economy was in recession, eBay’s sales growth had turned negative, and the stock price was lower than it had been since 2001. In a statement that touted the release of a Skype app for Apple’s iPhone, Donahoe announced that eBay would launch a Skype initial public offering as part of a separation.
But eBay never filed for a Skype IPO. Four and a half months after declaring the IPO strategy, eBay said it had reached an agreement to sell Skype to an investor group led by Silver Lake in a deal worth $2.75 billion. The online auction operator received a 30% stake in Skype’s buyer. Under the investor group, Skype filed for an IPO, but that didn’t come to pass, either. Microsoft wound up acquiring Skype in 2011 for $8.5 billion, with eBay receiving over $2 billion.
“Microsoft and Skype together will bring together hundreds of millions or, as Tony said, billions of consumers and empower them to communicate in new and interesting ways,” Microsoft’s CEO at the time, Steve Ballmer, said at a press conference, referring to comments earlier at the event from Skype’s leader, Tony Bates. By that point, 170 million people were using Skype each month. Ballmer aimed to integrate Skype with several Microsoft products, including Lync, Windows Live Messenger, Windows Phone and Xbox video game consoles. Microsoft also got Skype running on its Azure cloud infrastructure.
Skype did not manage to accumulate a billion active users, though.
Microsoft CEO Steve Ballmer, left, shakes hands with Skype CEO Tony Bates during a news conference on May 10, 2011 in San Francisco, California. Microsoft has agreed to buy Skype for $8.5 billion.
Justin Sullivan | Getty Images
Apple’s native iMessage and FaceTime were picking up traction on iOS devices. In 2014, Facebook bought WhatsApp, a mobile messaging app, and months later, users gained the ability to place calls across borders. WhatsApp took off globally. So did Tencent’s WeChat.
Skype, meanwhile, implemented multiple redesigns and faced criticism from devotees. In 2016, Microsoft introduced Teams as a distinct “chat-based workspace” for organizations with Office productivity software subscriptions that would compete with Slack, which was then an emerging startup.
When Covid came and pushed people to work and study from home, Zoom, originally conceived for business use, became a consumer favorite for holding video calls. People could also connect on video through services from Cisco, Facebook and Google. Skype did see a usage bump, but Microsoft put major engineering resources behind Teams for companies, governments and schools, and the investment paid off. Analysts began concentrating on the number of Teams users that Microsoft would disclose, with the figure exceeding 320 million in 2023.
As for Skype, Microsoft’s current CEO, Satya Nadella, hasn’t mentioned it on an earnings call since 2017.
In 2023, Microsoft said Skype had 36 million daily active users. That was down from 40 million in March 2020. Teper declined to talk about how many people use the service today, but did say the number of minutes consumers have spent on Teams calls increased four-fold in the past two years.
“I think a good write-up of the history of the thing would mark the shift to mobile and cloud as a significant change in the communications category,” Teper said.
WATCH: What happened to Skype?
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EToro, a stock brokerage platform that’s been ramping up in crypto, has priced its IPO at $52 a share, as the company prepares to test the market’s appetite for new offerings.
The Israel-based company raised nearly $310 million, selling nearly 6 million shares in a deal that values the business at about $4.2 billion. The company had planned to sell shares at $46 to $50 each. Another almost 6 million shares are being sold by existing investors.
IPOs looked poised for a rebound when President Donald Trump returned to the White House in January after a prolonged drought spurred by rising interest rates and inflationary concerns. CoreWeave’s March debut was a welcome sign for IPO hopefuls such as eToro, online lender Klarna and ticket reseller StubHub.
But tariff uncertainty temporarily stalled those plans. The retail trading platform filed for an initial public offering in March, but shelved plans as rising tariff uncertainty rattled markets. Klarna and StubHub did the same.
EToro’s Nasdaq debut, under ticker symbol ETOR, may indicate whether the public market is ready to take on risk. Digital physical therapy company Hinge Health has started its IPO roadshow, and said in a filing on Tuesday that it plans to raise up to $437 million in its upcoming offering. Also on Tuesday, fintech company Chime filed its prospectus with the SEC.
Another trading app, Webull, merged with a special-purpose acquisition company in April.
Founded in 2007 by brothers Yoni and Ronen Assia along with David Ring, eToro competes with the likes of Robinhood and makes money through fees related to trading, including spreads on buy and sell orders, and non-trading activities such as withdrawals and currency conversion.
Net income jumped almost thirteenfold last year to $192.4 million from $15.3 million a year earlier. The company has been ramping up its crypto business, with revenue from cryptoassets more than tripling to over $12 million in 2024. One-quarter of its net trading contribution last year came from crypto, up from 10% the prior year.
This isn’t eToro’s first attempt at going public. In 2022, the company scrapped plans to hit the market through a merger with a special purpose acquisition company (SPAC) during a sharp downturn in equity markets. The deal would have valued the company at more than $10 billion.
CEO Yoni Assia told CNBC early last year that eToro was still aiming for a market debut but “evaluating the right opportunity” as it was building relationships with exchanges, including the Nasdaq.
“We definitely are eyeing the public markets,” he said at the time. “I definitely see us becoming eventually a public company.”
EToro said in its prospectus that BlackRock had expressed interest in buying $100 million in shares at the IPO price. The company said it planned to sell 5 million shares in the offering, with existing investors and executives selling another 5 million.
Underwriters for the deal include Goldman Sachs, Jefferies and UBS.
— CNBC’s Ryan Browne and Jordan Novet contributed reporting
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Klay Thompson #31 of the Dallas Mavericks handles the ball during the game against the Memphis Grizzlies during the 2025 SoFi Play-In Tournament on April 18, 2025 at FedExForum in Memphis, Tennessee.
Joe Murphy | National Basketball Association | Getty Images
Chime Financial paid the NBA’s Dallas Mavericks roughly $33 million over three years to have its logo worn as a patch on player jerseys, the company disclosed in its IPO filing Tuesday.
The Mavericks finalized the jersey deal, along with “certain other sponsorship and promotional rights,” in 2020, but terms weren’t announced. CNBC reported at the time that, citing an NBA official, that the league’s patch sponsorships ranged from $2 million to $20 million per season, depending on market size.
Chime, a San Francisco-based fintech company that provides online banking services like direct deposit and credit cards, plans to soon debut on the Nasdaq. Cynthia Marshall, who was CEO for the Mavericks from 2018 until December of last year, is on Chime’s board, so the company included details of the arrangement in the related party transactions section of its filing.
The company said it paid the Mavericks $10.5 million in 2022, $11.5 million in 2023 and $11.2 million last year.
Marshall told CNBC in 2020 that the decision to select Chime for its jersey patch came as the team was looking to fill its official sponsorship slot, which came with the deal. The logo has been displayed around American Airlines Center, where the Mavericks play their home games.
“We wanted somebody that was doing well as a business and growing,” Marshall said. “It’s a perfect fit.”
Chime’s IPO filing lands a day after the Mavericks shocked the NBA world by winning the draft lottery and the right to draft presumed top pick Cooper Flagg from Duke University. The Mavericks had only a 1.8% chance of landing the top pick based on where they finished in the standings. ESPN reported on Wednesday that the Mavericks plan to draft Flagg and are not considering the possibility of trading him.
It was a remarkably fortuitous turn of events for a front office and ownership team that’s been roundly criticized for months since trading franchise cornerstone Luka Doncic in February, bringing back older star Anthony Davis in return.
Longtime owner Mark Cuban sold a majority stake in the Mavericks in 2023 to casino owner Miriam Adelson and her family.
In October, the Mavericks announced a multi-year extension to its Chime deal, agreeing to showcase the brand and the company’s products more broadly. One new aspect was the creation of Chime Lane, “a dedicated entrance featuring exclusive benefits for Chime members during Mavs games and select events at AAC,” the team said in a press release.
— CNBC’s Jordan Novet contributed to this report.
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