The Fallout of Microsoft’s Purchase of Skype

Since 2011, when Microsoft bought Skype for 8.5 billion dollars, it is not hard to find those who complain about how difficult the software has become to use. Even those who were true devotees to Skype are turning their backs on the once popular software. Negative reviews keep rising on the Google Play and Apple App stores for the Skype app for smartphones. The reviews range from the extreme battery demand it requires to the not-so-great call quality that it provided. Some people have tweeted or used other social media platforms to express how they refuse to use Skype ever again. Microsoft has come back with their reply to all the negativity as people’s overblown reaction to updates to the software.

Skype brought a radical change to the telecommunications landscape when they introduced the concept of making online calls 15 years ago. So, is it simply just people being unhappy with updates to the software or are there more factors that are turning this once highly thought of software into something that is gaining more negativity than anything else?

Microsoft adjusted the focus of Skype when they bought it to the corporate market. This change has caused it to become less user friendly. Many previous Skypers turned away from the software to use services that are from Apple, Facebook, Google and Snap that are similar.

Unfortunately, because the focus of Skype on business became a key part of the updates implemented, it has lost its appeal for the regular customers who one used it regularly to connect with family or friends at a long distance easily. Now, however, it has become quite unusable and confusing instead of the goal that it would be widely used and loved. It has been said by ex-Microsoft employees, who remained anonymous, felt that the number of Skype users have fallen from the 300 million users that Microsoft has reported but has not updated that number since 2016.

Internet Marketing via SkypeOriginally, a couple of Nordic entrepreneurs founded Skype in 2003. People were able to make calls overseas without the high costs that phone companies were charging. Skype made its money by offering prepaid calls to regular phones. There have been many owners that Skype has cycled through including EBay. In 2011, a group of investors controlled by Silver Lake, were looking for potential buyers which included Microsoft and even Google and Facebook were looking to acquire Skype.

At the time Microsoft saw the potential of Skype to move the company from solely relying on personal computers. Skype had already become so popular as an internet brand that people were using it as a verb. This popularity drove the then CEO of Microsoft to not only purchase the leading incumbent but to also pay a 40 percent premium more than the value of what Skype was at that time. It was seen as an opportunistic way to become part of something significant because Skype was the most recognized brand and asset at that time.

Although the former CFO of Skype reminded Microsoft of the reason Skype’s iconic popularity was due to the fact people were able to make either cheap, free or international calls, Microsoft chose to focus on corporations. It wasn’t an unreasonable strategy. However, originally Microsoft had Lync that was used as a phone service for corporations and was going to run Skype separately. After 2 years, however, the merge began and became Skype for Business and that then merged into Office.

The purpose of Skype for Business is now used by Microsoft to acquire Cisco customers by selling its Office 365 subscriptions, which is cloud-based. Skype has, essentially, become a corporate phone system replacement. It does of course provide modern features similar to instant messaging and social networking. Other features that Microsoft is incorporating is Teams, which is similar to Slack, and LinkedIn (which Microsoft has also acquired) to provide bios of people using Skype can see of those they are going to call. Microsoft is also using their pioneered AI technology to help translate calls in 12 different languages.

Microsoft uses their list of blue-chip customers to prove that their strategy is working. There are many big names like General Electric, Accenture and large banks are using Skype for Business according to marketing data. Businesses seem to find that they like how Office and Skype are integrated together and find it easy to use at a corporate level for conference calls, regular calls and project sharing.

All that is all good and well for corporations, however, the priority given to the corporate usage of Skype pushed out the regular clientele due to its lack of simplicity and quality of the call. The company does have 2 apps, however, both apps, even though they are separate, were made with the work force in mind so the underlying technology is not different. So, the users who loved Skype for what it used to be, the simplicity and user friendliness of it, is no longer there. Instead, people are now using Apple’s Facetime to connect with those around the world as their go to, or other similar apps that are easy to use for the day to day users instead of downloading the Skype app.

One other mistake that Microsoft made when they focused on the corporate market instead, is that they missed the rise of Facebook’s Messenger, WhatsApp and WeChat by Tencent. They had something similar, Windows Live, however, they let it go about 5 years ago around the same time that WhatsApp launched and amassed millions of users around the globe. Instant messaging is huge for many users around the world.

Those that have stuck with Skype and even those that use Skype for Business, found that the redesign they did last summer to be the worst overhaul that they did. Other complaints include calls that drop, won’t connect to a call, words dropped consistently, and other software updates where the address book disappears. Overall, the quality of the calls, both the audio and video, seem to be the biggest issue for users.

Even with all these complaints and issues, Microsoft is said to be tracking the calls that are dropped and looks into why it happened. People do need to realize that anything done online has the potential to not work due to loss of internet connection and other network or device issues, so it isn’t always necessarily Skype itself that is the problem. The other thing that users have to remember is that it is not the same as a normal phone, switching to another service that is similar has the potential to not work as well either. However, Microsoft is working to make progress. Even though there has been a whole redesign and there were many who responded negatively, users are starting to become more used to how it works and positive ratings are starting to gain traction again.