Communication has evolved significantly over the years. It started with cave paintings around 30,000 BCE, progressed to smoke signals and pigeons, and then advanced to electric communication in the 19th century.
But the days of telegraphs and telephones are long gone, and wireless and digital communication are leading the way today. The advent of the Internet substantially increased the speed and range of communication as well as the amount of information that can be shared.
Today, emerging technologies like the Internet of Things (IoT), Artificial intelligence (AI), and Augmented reality (AR) are enabling machine-to-machine communication, human-machine interaction, and virtual experiences of information.
This constant transformation in technology means products that were once popular and widely used are regularly becoming obsolete, and the latest victim of this change is Skype.
It was in 2003, when the internet was still a wild frontier, that Skype was launched. Skype made free voice and video calls over the internet a reality, disrupting traditional landlines.
But now, more than two decades later, Microsoft (MSFT +0.03%) is shutting down Skype.
This video calling and messaging software wasn’t the brainchild of the tech giant Bill Gates. Skype was actually founded by Niklas Zennström and Janus Friis as a peer-to-peer (P2P) service that allowed users to make voice calls over the internet, and from there, it evolved into a popular app for voice, video, and instant messaging.
The first public beta version of Skype was released in August 2003, and the original Skype application only allowed voice calls between PCs. In 2005, it released the 2.0 Beta version to introduce video calling. Towards the end of that year, eBay acquired Skype for $2.6 billion.
Less than six years after that, Microsoft acquired Skype for $8.5 billion. Over the years, the company made several developments in support of this application, such as discontinuing Windows Live Messenger in favor of Skype, which replaced its MSN Messenger.
All these actions helped Skype achieve milestones, such as over 70 million concurrent users in 2013. It also became the sixth most downloaded mobile app of the decade in 2019. These milestones showcase just how popular Skype once was, but this long-standing dominance in communication didn’t last long as newer platforms like WhatsApp took over.
Now, Microsoft is saying goodbye to Skype, which will be replaced by the free version of Microsoft Teams.
Microsoft Phases Out Skype, Teams Takes Center Stage
The announcement from Microsoft came on February 28, in which the tech giant shared its decision to bid adieu to this once wildly popular messaging and video call app.
Titled “The next chapter: Moving from Skype to Microsoft Teams,” the blog shared that the company will retire from Skype in two months to focus on its modern communications and collaboration hub — the free Microsoft Teams.
This move, Jeff Teper, President of Collaborative Apps and Platforms, said, streamlines the company’s free consumer communications offerings and will allow it to adapt to customer needs more easily.
While Skype will be no more, starting in early May 2025, Microsoft Teams will offer users many of the same core features that were available in Skype, like one-on-one calls and group calls, messaging, and file sharing.
In addition to these, Team offers enhanced features like managing calendars, hosting meetings, and building and joining communities.
In the announcement, Teper noted that hundreds of millions of people are already using Teams as their hub for teamwork, with the number of minutes spent in meetings by its users growing 4X in the past two years.
“As we take this next step with Teams, we’re excited about the opportunities ahead. We look forward to continuing to support people’s everyday connections, starting by making it easy to log into Teams with their Skype account.”
– Teper
This move marks the end of an era for a platform that once ruled the online video communication market. However, the retirement of Skype isn’t entirely surprising, given that it has been struggling to keep up with simpler, more modern, and reliable competitors.
The failure to evolve alongside its rival has now cost Skype its life.
Once a dominant online video calling service, Skype has been facing declining user numbers for years. Back in 2011, when Microsoft acquired Skype, it was boasting a massive 150 million monthly users. But these numbers fell to a mere 23 million by 2020.
This has been despite having a strong and long head-start over its rivals and in spite of the COVID-19 pandemic, which forced people to stay at home, and everything from entertainment, work, and study went online.
During the pandemic, online communication providers registered a huge growth by allowing people around the world to stay connected and engaged at work, school, and home.
Even Skype experienced a brief surge in popularity at the time, but despite that, it failed to capitalize on the opportunity and simply couldn’t recover the lost momentum. The thing is, the rivals performed much better at that time, helping them capture a significant market share.
For instance, at the start of 2020, Skype had a 32.4% video conferencing market share, which plunged to a mere 6.6% in the following year. During the same period, Zoom’s market share skyrocketed from 26.4% to 48.7% thanks to its customer-focused approach.
However, before this big decline hit, Skype was seeing a continued drop in its usage, which could also be attributed to Microsoft putting its attention somewhere else. The company launched Teams in 2017 as a more comprehensive collaboration tool that integrates messaging, file sharing, and video conferencing.
By 2021, Microsoft Team had completely replaced Skype for Business, offering seamless Office 365 integration. Integrated with Azure, Teams ensure enterprise-level security and scalability.
Over the years, the company continued investing in Teams while Skype was abandoned, resulting in long load times, glitches, clunky and frequent updates, and unnecessary functions. In the era of mobile phones, the lack of mobile optimization didn’t help the matter either.
Instead of refining the core video call experience for better user experience, Microsoft’s focus was on things that were of no use to its customers, leaving them confused, frustrated, and unsatisfied, ultimately sending them elsewhere.
Now, Microsoft has finally completely set aside Skype, removing it from the equation, and officially announced Teams as its primary communication platform. The company is now encouraging users to transition to Teams for free.
Logging in to Microsoft Teams with Skype credentials, contacts, and chats will transfer automatically so users can get started right away. But if they don’t want to migrate, users can export their contacts, call records, and chat history.
During the ongoing transition period, users can also continue messaging and calling Skype users via Teams, but paid Skype services will be discontinued.
After the shutdown date, existing users will only have limited access. Meanwhile, paid features such as international calling subscriptions and Skype Credit will no longer be offered to new customers.
In its farewell to Skype, Microsoft did acknowledge its contribution, noting, “Skype has been an integral part of shaping modern communications and supporting countless meaningful moments,” but “we’re excited about the new opportunities that Teams bring and are committed to helping you stay connected in new and meaningful ways.”
Click here for a list of five game-changing technologies that sputtered and died.
Beyond Skype: Leading Alternatives in Online Communication
With Skype to be discontinued on May 5, 2025, it will soon become a memory of the past while Teams continue to gain the limelight. But that’s not the only option in the market. There are several promising alternatives available that are helping advance the world of online communication.
1. Zoom Communications (ZM +0.83%)
One of the most popular software providers for video conferencing, webinars, and virtual meetings, Zoom was founded in 2011. The California-headquartered Zoom has captured a strong market share in enterprise communication and hybrid work solutions despite having many competitors.
Its user base has been growing at a rapid pace. Within a few months of its debut, Zoom had over a million users, and during the pandemic, it became one of the most downloaded applications worldwide. In December 2020, Zoom reported 350 million daily users, but with growth came criticism for security and privacy issues.
In Feb. 2025, Amazon (AMZN -0.6%) made Zoom its “standard meeting application” after retiring its own internal meeting software for video and audio calls, Chime, due to “limited” use outside of the company. As for Zoom, it has been adopted due to being “a good fit” for its employees.
Zoom’s success has been driven by its simple and reliable interface, easy setup, and high-quality video conferencing. In addition to following a customer-focused approach, Zoom has been constantly expanding its services through AI-powered features like Zoom AI Companion and productivity tools like Zoom Phone, Zoom Whiteboard, and Zoom Events.
With a market cap of $22.77 billion, Zoom shares (ZM:NASDAQ) are currently trading at $74.31, down 8.94% YTD. Its EPS (TTM) is 3.20, while its P/E (TTM) is 23.21.
Zoom Video Communications, Inc. (ZM +0.83%)
When it comes to the company’s financials, Zoom reported a total revenue of $1.18 billion for Q4, an increase of 3.3% year over year, while the total revenue for the full fiscal year was $4.66 billion. During this recent quarter, the company’s Enterprise revenue was $706.8 million, and Online revenue was $477.3 million, which was an increase of 5.9% YoY and a decline of 0.4% YoY, respectively. Operating cash flow came in at $424.6 million, while cash and marketable securities as of January 31, 2025, were $7.8 billion.
In Q4, Zoom repurchased about 4.3 million shares of common stock, while 15.9 million shares were bought during the full fiscal year.
“In FY25, Zoom AI Companion emerged as the driving force behind our transformation into an AI-first company, enabling our customers to discover enhanced productivity opportunities. As Zoom AI Companion becomes increasingly agentic, we look forward to continuing to help our customers fully realize the benefits of AI and discover what’s possible with AI agents.”
– CEO and founder Eric S. Yuan
2. Google Meet, a Part of Alphabet Inc. (GOOGL +2.34%)
The leading tech giant Google operates across several segments, including Google Workspace, which includes cloud-based communication and collaboration tools for enterprises like Calendar, Gmail, Docs, Drive, and Meet.
In the world of online communication, Google initially launched Google Hangouts in 2013, which was later rebranded to Meet. In addition to being integrated deeply into other Google Workspace offerings, Meet offers AI-powered enhancements and boasts a strong user base thanks to Google’s dominance in cloud and enterprise services. It also leverages Google’s servers for high-speed and reliable connectivity, enabling it to dominate the market.
Most recently, Google announced new AI-driven updates for Google Meet to boost accessibility and productivity. This included an upgraded Gemini AI feature, which suggests actionable “next steps” after a meeting. The feature is dedicated to the Business and Enterprise users of Google Workspace along with the Gemini Enterprise users.
This “next steps” feature adds to the “take notes for me” feature, which was first introduced in Google Meet last year and uses voice-to-text capability to transcribe meeting conversations before summarizing them.
Google Meet has also made it easier for users to access missed conversations through the ability to scroll through live captions from the past 30 minutes.
With a market cap of $2.039 trillion, Google’s parent company, Alphabet shares are trading at $167.01, down 11.77% YTD. Its EPS (TTM) is 8.05 and the P/E (TTM) is 20.74 while the dividend yield paid is 0.48%.
In Q4 2025, the company reported revenue of $96.5 billion, a 12% YoY increase, while the revenue for the full year was $350 billion, up 14% YoY. During the quarter, revenue from Google services was $84.1 billion, $12 billion from Google Cloud, and $10.5 bln was from YouTube advertising.
Alphabet Inc. (GOOGL +2.34%)
Its operating income rose 31% YoY to $31 billion, and net income jumped 28% YoY to $26.5 billion. Earnings Per Share (EPS), meanwhile, was $2.15. Free cash flow was $24.8 billion, while cash and marketable securities at the end of Q4 were $96 billion. During the quarter, the company also repurchased $15 billion, totaling nearly $70 billion for 2024.
For this strong quarter, Alphabet and Google CEO Sundar Pichai attributed dramatic progress across compute model capabilities, driving efficiencies and rapidly shipping product improvements.
“We’re pushing the next frontiers, from AI agents, reasoning and deep research, to state-of-the-art video, quantum computing and more.”
– Pichai
3. Signal
This US-based application is a privacy-focused messaging app with encrypted video calling. The company behind Signal is the non-profit Signal Foundation, which relies on donations instead of traditional revenue models for the operation of the app.
Signal was formed through a merger of TextSecure and RedPhone. Signal Foundation’s flagship app, which has end-to-end encrypted messaging, was launched in 2015.
The focus of the app is on privacy and end-to-end encryption, which is what makes Signal stand apart from its competitors. The open-source nature of it makes Signal both transparent and trustworthy. These features are helping the messaging app gain traction among privacy-conscious users against the backdrop of rising concerns about data collection, data breaches, surveillance, and cyber threats.
As one of the best-encrypted messenger apps currently available in the market, Signal is fast becoming a solid alternative to Zoom, Google Meet, and Microsoft Teams.
This free and secure video conferencing service added support for group video calls back in 2020 and continues to bring new features, such as the ability to add up to 50 people to a group call, a dedicated tab for calls, emoji reactions, and link creations for meetups that help it be competitive and gain adoption.
“Video calls have become a new normal meeting place for organizations, workplaces, and groups of friends all over the world. As communication norms change, Signal’s promise of a private place to communicate stays the same,” the company said in a blog post, where it noted that it continues to make improvements to make Signal calling better overall.
Back in 2024, Signal had 70 million active users, most of which moved from WhatsApp in response to its privacy update in 2022 that it would share data with its parent Meta (previously Facebook). Despite millions of users shifting to Signal, which caused its servers to crash and access to be limited for a couple of days, the messaging platform still remains in the niche.
Click here to learn why privacy is an unattainable carrot.
Conclusion
Advances in technology have completely transformed human lives, reshaping how we connect and communicate with each other. However, this very rapid pace of innovation in technology often renders prominent solutions obsolete.
We are seeing this with the demise of Skype, which marks the end of an era for an online communication service provider that once ruled this space. This highlights how even the most dominant players can fade so easily if they remain stagnant and fail to adapt.
Now, as Microsoft shifts its focus to Teams and rivals like Zoom and Google Meet prioritize adaptability, user needs, and cutting-edge technology, users will continue to benefit from the competition and constant innovation that brings better features and enhanced overall experience!
Click here to learn how new insights into phononics may redefine next-gen communication devices.