Skype () was a proprietary telecommunications application operated by Skype Technologies, an acquired division of Microsoft, best known for IP-based videotelephony, videoconferencing and voice calls. It also had instant messaging, file transfer, debit-based calls to landline and mobile telephones (over traditional telephone networks), and other features. It was available on various desktop, mobile, and video game console platforms.
Skype was created by Niklas Zennström, Janus Friis, and four Estonian developers, and first released on August 29, 2003. In September 2005, eBay acquired it for $2.6 billion. In September 2009, Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board bought 65% of Skype for $1.9 billion from eBay, valuing the business at $2.92 billion. In May 2011, Microsoft bought Skype for $8.5 billion and used it to replace its own Windows Live Messenger. As of 2011, most of the development team and 44% of all the division's employees were in Tallinn and Tartu, Estonia.
Skype originally featured a hybrid peer-to-peer and client–server system. It became entirely powered by Microsoft-operated supernodes in May 2012; in 2017, it changed from a peer-to-peer service to a centralized Azure-based service. In February 2023, it was used by 36 million people each day.
The service was retired on 5 May 2025, and the website now redirects users to Microsoft Teams; however, the Skype Dial Pad remains functional for users with paid services.
Etymology The name for the software was derived from the words "sky" and "peer-to-peer", the latter of which described the software's network architecture. This was then abbreviated to "Skyper"; however, some of the domain names for Skyper were already taken. By dropping the final "r", the title became "Skype", for which domain names were available at the time.
History
Skype was founded in 2003 by Niklas Zennström, from Sweden, and Janus Friis, from Denmark. The software was created by Estonians Ahti Heinla, Priit Kasesalu, Jaan Tallinn, and Toivo Annus. Friis and Annus are credited with the idea of reducing the cost of voice calls by using a P2P protocol like that of Kazaa. An early alpha version was created and tested in spring 2003, and the first public beta version was released on 29 August 2003.
In June 2005, Skype entered an agreement with Polish web portal Onet.pl for an integrated offering on the Polish market. On 12 September 2005, eBay Inc. agreed to acquire Luxembourg-based Skype Technologies SA for approximately US$2.5 billion in up-front cash and eBay stock, plus potential performance-based consideration. On 1 September 2009, eBay announced it was selling 65% of Skype to Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board for US$1.9 billion, valuing Skype at US$2.75 billion. On 14 July 2011, Skype partnered with Comcast to bring its video chat service to Comcast subscribers via HDTV sets.Ryan Lawler, GigaOm. "Comcast bringing Skype video chat into the living room ." 13 June 2011. Retrieved 13 June 2011.
On 17 June 2013, Skype released free video messaging services for Windows, Mac OS, iOS, iPadOS, Android, and BlackBerry.
Between 2017 and 2020, Skype collaborated with PayPal to provide a money-send feature, enabling users to transfer funds via the Skype mobile app in the middle of a conversation.
Microsoft acquisition
On 10 May 2011, Microsoft Corporation acquired Skype Communications, S.à r.l for US$8.5 billion. It was incorporated as a division of Microsoft, which acquired all its technologies with the purchase. The acquisition was completed on 13 October 2011. Microsoft began integrating the Skype service with its own products. Along with taking over the development of existing Skype desktop and mobile apps, it developed a dedicated client app for its then-newly released, touch-focused Windows 8 and Windows RT operating systems, which were made available from Windows Store when the then-new OS launched on 26 October 2012. The following year, it became the default messaging app for Windows 8.1, replacing the Windows 8 Messaging app at the time, and was pre-installed on every device that came with or upgraded to 8.1.
In a month-long transition from 8 to 30 April 2013, Microsoft discontinued two of its own products in favor of Skype, including its Windows Live Messenger instant messaging service, although Messenger continued to be available in mainland China until October 2014.
On 11 November 2014, Microsoft announced that in 2015, its Lync product would be replaced by Skype for Business, combining the features of Lync and the consumer Skype software. Organizations that used it could switch their users between the default Skype for Business interface and the Lync interface.
Post-acquisition On 12 August 2013, Skype released the 4.10 update for Apple iPhone and iPad apps that allowed HD quality video for iPhone 5 and fourth-generation iPads.
On 20 November 2014, Microsoft Office's team announced that a new chat powered by Skype would be implemented in their software, enabling users to chat with co-workers in the same document.
On 15 September 2015, Skype announced the release of Mojis ("a brand new way to express yourself on Skype")—short video clips and GIFs featuring characters from films and TV shows that could be entered into conversations like emoticons. Skype worked with Universal Studios, Disney Muppets, BBC and other studios to enhance the Mojis collection. Later that year, Gurdeep Singh Pall, Corporate Vice President of Skype, announced that Microsoft had acquired the technology from Talko.
In July 2016, Skype introduced an early Alpha version of a new Skype for Linux client, built with WebRTC technology, after several petitions asked Microsoft to continue development for Linux. In September of that year, Skype updated their iOS app with new features, including an option to call contacts on Skype through Siri voice commands. In October of that year, Microsoft launched Skype for Business for Mac.
In February 2017, Microsoft announced plans to discontinue its Skype Wi-Fi service globally. The application was delisted, and the service itself became non-functional from 31 March 2017. On 5 June 2017, Microsoft announced its plans to revamp Skype with similar features to Snapchat, allowing users to share temporary copies of their photos and video files. In late June 2017, Microsoft rolled out their latest update for iOS, incorporating a revamped design and new third-party integrations, with platforms including Gfycat, YouTube, and UpWorthy. It was not well-received, with numerous negative reviews and complaints that the new client broke existing functionality. Skype later removed this "makeover". In December 2017, Microsoft added "Skype Interviews", a shared code editing system for those wishing to hold job interviews for programming roles.
In April 2017, Microsoft eventually moved the service from a peer-to-peer to a central server based system, enabling cloud-based storage of text messages/pictures and temporary 30-day storage of videos/file attachments/voice messages/call recordings. It also adjusted the user interfaces of apps to make text-based messaging more prominent than voice calling. Skype for Windows, iOS, Android, Mac and Linux all received significant visual overhauls at this time. Users with legacy Skype accounts were able to retain their usernames, while new users are no longer able to manually choose a username. New user registrations associated with a Microsoft account were assigned a username with a live: prefix followed by an autogenerated alphanumeric string.
In 2019, Skype was declared the sixth most-downloaded mobile app of the decade, from 2010 to 2019.
In February 2025, Microsoft announced that Skype would be retired on 5 May 2025, to be replaced with the free version of Microsoft Teams.
Features
Registered users of Skype were identified by a unique Skype ID and may be listed in the Skype directory under a Skype username. Skype allowed these registered users to communicate through both instant messaging and voice chat. Voice chat allowed telephone calls between pairs of users and conference calling and used proprietary audio codec. Skype's text chat client allowed group chats, emoticons, storing chat history, and editing of previous messages. Offline messages were implemented in a beta build of version 5 but removed after a few weeks without notification. The usual features familiar to instant messaging users—user profiles, online status indicators, and so on—are also included.
The Online Number, a.k.a. SkypeIn, service allowed Skype users to receive calls on their computers dialed by conventional phone subscribers to a local Skype phone number; local numbers are available for Australia, Belgium, Brazil, Chile, Colombia, Denmark, the Dominican Republic, Estonia, Finland, France, Germany, Hong Kong, Hungary, India, Ireland, Japan, Mexico, Nepal, New Zealand, Poland, Romania, South Africa, South Korea, Sweden, Switzerland, Turkey, the Netherlands, the United Kingdom, and the United States. A Skype user could have local numbers in any of these countries, with calls to the number charged at the same rate as calls to fixed lines in the country.
Skype supported conference calls, video chats, and screen sharing between 25 people at a time for free, which then increased to 50 on 5 April 2019.
Skype did not provide the ability to call emergency numbers, such as 112 in Europe, 911 in North America, 999 in the UK or 100 in India and Nepal. However, as of December 2012, there was limited support for emergency calls in the United Kingdom, Australia, Denmark, and Finland. The U.S. Federal Communications Commission (FCC) has ruled that, for the purposes of section 255 of the Telecommunications Act, Skype was not an "interconnected VoIP provider". As a result, the U.S. National Emergency Number Association recommended that all VoIP users have an analog line available as a backup.
In 2019, Skype added an option to blur the background in a video chat interface using AI algorithms purely done using software, despite a depth-sensing camera not being present in most webcams.
In 2023, Skype added the Bing AI chatbot to the platform for users who had access to the chatbot.
Usage and traffic
Usage and traffic Date Total user accounts(millions) Active users, daily use(millions) Skype to Skype minutes(billions) SkypeOut minutes(billions) Revenue USD(millions) Q4 2005 74.7 10.8 Q1 2006 94.6 15.2 6.9 0.7 35 Q2 2006 113.1 16.6 7.1 0.8 44 Q3 2006 135.9 18.7 6.6 1.1 50 Q4 2006 171.2 21.2 7.6 1.5 66 Q1 2007 195.5 23.2 7.7 1.3 79 Q2 2007 219.6 23.9 7.1 1.3 90 Q3 2007 245.7 24.2 6.1 1.4 98 Q4 2007 276.3 27.0 11.9 1.6 115 Q1 2008 309.3 31.3 14.2 1.7 126 Q2 2008 338.2 32.0 14.8 1.9 136 Q3 2008 370 33.7 16.0 2.2 143 Q4 2008 405 36.5 20.5 2.6 145 Q1 2009 443 42.2 23.6 2.9 153 Q2 2009 483 25.5 3.0 170 Q3 2009 521 27.7 3.1 185 Q4 2009 560 36.1 Q1 2010 190 12.8 860 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 663 Q4 2011 Q1 2012 Q2 2012 Users may have had more than one account; it is not possible to count users, only accounts.
The volume of international traffic routed via Skype was significant. In 2009 it was considered the largest international voice carrier (by minutes of calls). YearInternational call market share20052.9%20064.4%20088%200912%201013%201233%201336%201440% At the end of 2010, there were over 660 million worldwide users, with over 300 million estimated active each month as of August 2015. At one point in February 2012, there were 34 million users concurrently online on Skype.