Microsoft Bought Skype for $8.5 Billion… Now It’s Flushing It Down the Drain

Well, it finally happened. The software that single-handedly made long-distance relationships in the early 2000s slightly more bearable (while simultaneously making us all look like pixelated potatoes) is officially getting the axe. Microsoft is shutting down Skype.

It’s a sad day… especially for those of us who still use it daily (RIP to my muscle memory that clicks on my “Skype” bookmark everytime I send a message). But in reality, we all saw this coming. Skype had been on life support for years, and now, 14 years after Microsoft bought it for $8.5 billion, the company is finally pulling the plug.

Skype was once the name in internet calls. It was revolutionary. Instead of paying exorbitant long-distance fees or dealing with landlines, you could hop on a free video call with anyone, anywhere. And for a while, it worked like magic. Then Microsoft happened.

Back in 2011, then-CEO Steve Ballmer dropped a $8.5 billion on Skype… an eye-watering 40% premium over its internal valuation. (Yes, the same Ballmer who once laughed at the iPhone and thought Zune was a good idea.) The plan was to turn Skype into the ultimate communication tool, but instead, Microsoft did what Microsoft does best… slowly suffocate an acquisition with corporate nonsense.

At its peak, Skype had over 300 million monthly users. But then came the great exodus. Zoom, WhatsApp, FaceTime, and even Snapchat swooped in with smoother interfaces, better reliability, and none of the phantom call glitches that turned Skype into a frustrating mess. By 2023, Skype’s daily users had dwindled to just 36 million… a number that Microsoft execs probably looked at and said, yeah, it’s time.

If you’re still clinging to Skype, Microsoft has a plan for you… Teams. The same workplace chat app that’s been slowly taking over corporate America is now being repackaged as Skype 2.0 for everyday users. Microsoft is even offering a seamless transition, moving all your contacts, chat history, and group conversations to Teams automatically.

But there’s a catch. One of Skype’s most beloved features (calling actual phone numbers) is getting the boot. Microsoft decided that since VoIP is widely available and mobile data is cheaper than ever, it’s not worth keeping around. If you still have Skype credits, they’ll work inside Teams… until Microsoft inevitably finds a way to make them disappear.

So why did Microsoft let Skype die? Simple... the world moved on, and Skype didn’t. During the early days of the pandemic, when literally everyone needed video calling, Zoom became the go-to. Meanwhile, Skype… just kinda sat there, confused, like that one kid who didn’t get picked for dodgeball. Even Microsoft knew it was over. Instead of trying to fix Skype, they built Teams from scratch and funneled their resources into making it the ultimate Slack competitor. And guess what? It worked. Teams now has 320 million monthly users… nearly ten times what Skype has left.

Microsoft has set May 5 as Skype’s official expiration date, giving die-hard users (all 12 of them, including me) about 60 days to migrate or export their chat history before it vanishes into the digital ether. No layoffs will come from this move, just a quiet reassignment of Skype’s remaining developers to more… productive ventures.

So, let’s pour one out for Skype. It gave us so many “Can you hear me now?” moments, countless dropped calls, and that iconic ringtone that will forever haunt our dreams. Gone, but never forgotten… unless you’re Microsoft, in which case, it’s already deleted from the roadmap. RIP Skype. You were a real one (even though you glitched or stopped working every single day).

PS: If you want stock picks and trade ideas every single day (in addition to breaking news)… you should definitely check out our premium membership. Our team of real investors digs through SEC filings and insider trades daily, flagging opportunities that stand out. When we spot a can’t-miss trade, we break it down in a full write-up… on top of all the other perks you get as a premium member. Check it out here. 

Stock.News has positions in Microsoft.