The free call that broke the long distance business
Skype arrived in 2003 as a peer to peer experiment. Niklas Zennström and Janus Friis, the pair behind the file sharing program Kazaa, pointed the same distributed network idea at voice calls and then gave the software away.
The pitch needed no explanation. International calls were billed by the minute in 2003, and Skype made computer to computer calls free. Students called home from dorm rooms, grandparents met grandchildren over webcams, and freelancers ran whole businesses through a laptop microphone.
The engineering came out of Estonia, and the people who wrote it were not telecoms veterans. "We were smart engineers," former chief technical architect Ahti Heinla told CNBC in 2023. "We learned on the go. None of us had any telecoms background."
The name became a verb, which is the rarest thing a piece of software can do. People did not say they would place a video call. They said they would Skype you, and they said it on a desktop crowded with chat programs that have since died too, next to MSN Messenger and Yahoo Messenger.
What Microsoft got for $8.5 billion in 2011
Microsoft announced the purchase on May 10, 2011. The price was $8.5 billion in cash, paid to an investor group led by Silver Lake, and it was the largest acquisition Microsoft had made to that point.
"Skype is a phenomenal service that is loved by millions of people around the world," Steve Ballmer said in the press release Microsoft filed with the Securities and Exchange Commission that day. Ballmer was Microsoft's chief executive at the time, and Skype chief executive Tony Bates was named president of a new Microsoft Skype Division.
The numbers in that filing explain the price. Skype counted 170 million connected users, and they logged more than 207 billion minutes of voice and video conversations in 2010 alone. No telephone company had built anything close to that in seven years.
The plan was distribution. Skype went into Windows, into Xbox and into Outlook.com, and for the next decade it was how Microsoft handled consumer calling. What Microsoft did not buy was a business that paid for itself at that price. The revenue came from the minority who bought credit to dial real phone numbers, while the free app to app calling was the part almost everyone actually used.
How 300 million users turned into 36 million
Skype passed 300 million monthly users in 2016, according to the Microsoft figures CNBC reported in 2023. By 2023 the count was down to roughly 36 million.
The decline had three causes, and no single bad decision among them. Phones came first. WhatsApp and FaceTime put free calling inside apps people already carried, with no separate account to remember and no desktop client to install.
Then Microsoft split its own attention. Teams shipped as the company's serious communication product and took the engineering budget, the enterprise contracts and the marketing, while Skype was redesigned, criticized, and redesigned back again.
Then came 2020. The year the world moved onto video calls should have belonged to the company that had been selling video calls since 2003. Instead Zoom became the shorthand for a work meeting, and Microsoft answered it with Teams rather than with Skype. By the time offices reopened, Skype was software people still had installed rather than software they opened.
Jaan Tallinn, one of the original programmers, was not sentimental about it when CNBC asked him in 2023: "I don't know what the future holds for Skype."
Who owns Skype today, and what runs in its place?
Microsoft still owns the Skype name and everything attached to it. What it no longer runs is a Skype service. The consumer product stopped working on May 5, 2025, and nothing done in 2026 brings the app back.
Microsoft announced the retirement on February 28, 2025. Jeff Teper, the Microsoft president responsible for Microsoft 365 collaborative apps and platforms, wrote on the Microsoft 365 blog that the company would "be retiring Skype in May 2025 to focus on Microsoft Teams (free), our modern communications and collaboration hub."
Microsoft Teams Free is the replacement, and the handover was meant to be mechanical. Microsoft told users to sign in to Teams with the same Skype username and password, and said contacts and chat history would come across with them. The Skype apps and the sign-in page on skype.com now point at Teams instead of a login screen.
Teper wrote the eulogy in that same post: "Skype has been an integral part of shaping modern communications and supporting countless meaningful moments, and we are honored to have been part of the journey."
One clarification, because it still confuses people in 2026: Skype for Business was a separate corporate product on its own timetable, and it is not the thing that shut down in May 2025.
What happened to Skype Credit and Skype Numbers
This is the part that costs real money, so it is worth being exact.
Skype Credit did not vanish. A balance that was live on shutdown day moved across to Microsoft Teams Free, where it still pays for calls to landlines and mobile numbers through the Skype Dial Pad. Microsoft kept that dial pad running for exactly this reason, and in 2026 it shows up only for accounts that still hold credit or an active subscription.
What stopped was buying more. Microsoft closed new Skype Credit purchases and new subscriptions when it announced the retirement in February 2025, so a surviving balance can only shrink. There is no top up and no way to reopen the tap.
Skype Numbers, the rented phone lines that let people reach you from an ordinary telephone, were the harder loss. Microsoft ended renewals and reactivation, so anyone who wanted to keep a number had to port it to another carrier while the subscription was still live. Microsoft's retirement notice now states that all Skype Number subscriptions ended in May 2026 and that Skype Number port out requests are no longer available. A number nobody moved in time went back into the pool, and there is no process for claiming one back.
Are your old Skype chats gone in 2026?
For almost everyone, yes. Microsoft's first notice said Skype data would stay available until January 2026. That date moved, which is why plenty of people who checked once and relaxed lost everything anyway.
The final schedule published on Microsoft's export page was stricter than it sounded. Deletion of Skype chat and call history began on April 1, 2026. The export portal stayed open until June 15, 2026, with a warning that anything downloaded after April 1 might already be incomplete. Both dates are now in the past.
One group kept its history. People who were active on Skype between December 2024 and February 2025, and who then signed in to Microsoft Teams Free before December 1, 2025, had their Skype chats and call logs carried into Teams, where they remain.
Everyone else is out of luck. If you never moved to Microsoft Teams Free and never ran an export, those messages are not sitting in an archive waiting for a support ticket. Microsoft deleted them.
Frequently Asked Questions
Is Skype still around in 2026?
No. Microsoft retired Skype on May 5, 2025 and has not reversed the decision. In 2026 the Skype apps and the skype.com sign-in page send people to Microsoft Teams Free instead, and Skype takes no new sign-ups and sells no new Skype Credit.
What replaced Skype?
Microsoft Teams Free replaced Skype when Skype was retired on May 5, 2025. Skype users were told to sign in to Teams with the same credentials to keep their contacts and chat history, and the Skype Dial Pad survives inside Microsoft Teams Free so leftover Skype Credit can still call landlines and mobile numbers.
Can I still get my old Skype messages back?
Almost certainly not. Microsoft began deleting Skype chat and call history on April 1, 2026 and closed the Skype export portal on June 15, 2026. The only surviving copies sit inside Microsoft Teams Free, for people who were active on Skype between December 2024 and February 2025 and signed in to Teams Free before December 1, 2025.