What is Skype? A history of Microsoft's free video-calling app and how to use it

• Skype is a free video-calling platform that Microsoft acquired for $8.5 billion over a decade ago.
• Skype was once the go-to video-calling app and telecommunications industry disruptor.
• But now, Skype has faded out of popular usage in favor of platforms like Zoom and Microsoft Teams.

Skype, a telecommunications platform currently owned by Microsoft, became ubiquitous in the early 2000s, at one point accounting for up to 40% of all international calls.

While Skype has since lost some of its audience to Microsoft Teams — particularly in the business context — and a significant portion of its market share to Zoom, it still maintained an average of 40 million daily users as of 2020.

Founded in 2003 by Swedish entrepreneur Niklas Zennström and Danish entrepreneur Janus Friis, Skype held its first public trial in August of that year. By 2005, the company was acquired by eBay for $2.5 billion. In 2009, a portion of Skype was resold to Silver Lake, Andreessen Horowitz, and the Canadian Pension Plan Investment Board for $1.9 billion, giving the company a market valuation of $2.75 billion.

Microsoft acquired Skype in 2011 for $8.5 billion, making it a division of Microsoft with its former CEO Tony Bates reporting to then-Microsoft CEO Steve Ballmer.

Following the acquisition, Microsoft integrated Skype into its product lineup, discontinuing Windows Messenger in favor of the Skype client, which became the default messaging service in Windows 8.1. By 2013, Skype was available across multiple platforms, including Windows, macOS, iPadOS, iOS, Android, and BlackBerry.

Skype was once a telecommunications industry disruptor

By offering free voice and video calls between Skype users globally, it effectively undercut traditional telecommunications providers that charged hefty fees for international calls. This disruptive technology approach that Skype took paid dividends in terms of the platform's immense popularity, especially in regions where long-distance calling was prohibitively expensive.

Instead of paying telecommunications companies long-distance rates, the only fee you'd incur would be the internet data that Skype used for your audio or video call. Skype also offered low rates for calls to landlines and cellphones.

Through its North American subscription plan, you could get 2,000 minutes of calling for $5.94/month – or the equivalent of about 0.297 cents per minute; if you go over 2,000 minutes, the rate goes to $0.35/minute. For US only calls, a 2,000 minute plan costs just $2.54 with extra time costing only $0.15/minute.

Skype's advantages and disadvantages

Despite no longer being the industry leader in terms of market share, Skype is still a capable free solution for video and audio calls.

Unlike the free version of Zoom, Skype doesn't have a 30 minute time limit. Additionally, in 2023 Microsoft integrated Bing AI with Skype, allowing users to converse with it in a private chat or mention it in group chats and ask it questions; you can even ask it to help plan vacation destinations or generate jokes.

However, Microsoft has clearly prioritized other tech like Microsoft Teams at the expense of Skype over the years.

In 2015, Skype for Business replaced Lync as Microsoft's business communication solution. In 2017, Microsoft announced plans to replace Skype for Business with Microsoft Teams, with its official retirement occurring in July 2021.

Where Zoom and Teams pull away from Skype is less in the one-on-one context and more in business centric contexts where you might have more than 50 people – the maximum size Skype supports – on a single call. Skype also does not have breakout room functionality like what you see with Zoom.

How to use Skype

Once you've downloaded Skype to your computer or mobile device, you can make a new Skype call through desktop or mobile by opening the Skype app and clicking New call or Start a call.

You can add contacts to Skype or invite people to join Skype by navigating to the Contacts tab and clicking New Contact and searching for the person via their Skype name, phone number, email, or full name.

How to delete your Skype account

If you, too, are gravitating towards platforms like Zoom or Teams rather than Skype, you might be wondering how to delete your Skype account.

Since your Skype account is tied into your Microsoft account, it is not possible to close your Skype account without closing your entire Microsoft account. If you want to proceed, you can close your Microsoft account by visiting the Microsoft account closure page, signing in, and selecting either 30 or 60 days from the dropdown, clicking Next, and following Microsoft's prompts.

How to change your Skype name

Your Skype name itself cannot be changed, however, you change your account's display name.

Start by clicking on your Skype profile picture, then select Skype profile and click the pencil icon to edit the display name and make your changes.