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Report: Skype’s Annual Revenue Dropped 74.5% in Almost 10 Years

Posted February 14, 2023 | Cloud | Microsoft Consumer Services | Skype | Windows

Skype, the app that pioneered VoIP-based communication in the early 2000s has lost much of its momentum under Microsoft’s leadership. Today, a report from the French publication L’Informé (paywalled) reveals that Skype’s annual revenue dropped below the $200 million bar last year.

According to Skype’s financial information filed in Luxemburg, the company’s annual revenue dropped from $722 million in 2013 to just $184.3 million in 2022, which represents a 74.5% decrease. During that same timeframe, the company also saw its annual profit drop from 90,8 million to a meager $6.35 million. Yes, that’s a 93% decrease in almost 10 years.

Skype’s financial information also suggests a decline in the demand for Skype credit, which users can purchase to call mobiles and landlines to over 300 countries. The documents also revealed that Skype offering free calls to Ukraine since the conflict with Russia began last year cost the company $7.5 million.

Microsoft acquired Skype in 2011 for $8.5 billion, and this was one of the last big Microsoft acquisitions from the Steve Ballmer era. Skype already had a “prosumer” audience back in the day, and it was also ubiquitous. While Skype was uniquely positioned to become a juggernaut on mobile, it was way too slow to evolve compared to new apps like WhatsApp and Facebook Messenger.

In the past decade, Microsoft also lost years transitioning Skype from a peer-to-peer architecture to a cloud-based one. Additionally, Skype probably lost many power users after a controversial redesign initially dropped basic features such as the ability to open conversations in separate windows. If Skype is in a much better shape today, the app was still eclipsed by Zoom and Microsoft Teams during the COVID-19 pandemic.

It probably doesn’t help that Microsoft now wants Teams to become its default messaging app for consumers: Windows 11 comes with a new Chat app powered by the Teams for Consumers experience, even though the “Teams” brand doesn’t really sound like something consumers would want to use to keep up with friends and family.

Back in 2020, Microsoft announced that Skype had 100 million monthly active users. “Skype has been in our lives for nearly two decades, and we are here to stay,” the company said a year later in a blog post about the future of Skype. Even though Microsoft is still committed to Skype, we may come to a point where it no longer makes sense for the company to have the app coexist with Microsoft Teams, which crossed 270 million monthly active users last year.

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