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. 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.
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