Skype

In the early 2000s, Niklas Zennström and Janus Friis applied the peer-to-peer lessons from Kazaa to a much bigger target: the telephone industry. Together with Estonian engineers Ahti Heinla, Priit Kasesalu, Jaan Tallinn, and Toivo Annus, they built Skype as a decentralized calling service that could bypass traditional telecom infrastructure. The first public beta appeared on August 29, 2003, and within weeks the service had attracted tens of thousands of users who were drawn by the promise of free voice calls across borders.

That early traction turned Skype into one of the most downloaded communications applications in history and forced incumbent phone companies to rethink their pricing. Growth brought new challenges, including the legal and technical complexity of scaling a peer-to-peer network for millions of users. The founders sold the business to eBay in 2005, beginning a series of ownership changes that would test whether the technology could survive inside larger corporate structures.

Microsoft bought Skype in 2011 for $8.5 billion and began integrating it into Windows, Office, Xbox, and later Teams. Under Microsoft, the original peer-to-peer architecture was replaced by centralized Azure-based services, and the service broadened from consumer calls into business collaboration. After more than two decades, Microsoft retired the consumer service on May 5, 2025, and directed users toward Microsoft Teams, leaving Skype as a defining chapter in the story of internet telephony.