Happy 10th birthday Skype. You changed everything; too bad you didn’t change Microsoft

Very quietly today, Skype turned ten years old. Ironically, I didn’t even remember its 10th birthday. I forgot, mostly because ever since it was acquired by Microsoft (s msft), Skype as we know is slowly losing its identity. It is merely a pale imitation of its former rebellious self, a Microsoft product that is there just to further Microsoft’s vague and unclear ambitions about unified communications.

It is like a rock star who has lost his edge.

janusniklasStill, I choose to remember the Skype of the early days — that little startup that brought blood into the eyes of telecom executives everywhere. That tiny startup that forced eBay’s (s ebay) management to put its head into the lion’s mouth. That tiny little startup that single-handedly did what no trustbuster had been able to do — put the telecoms on the defensive.

Skype was my kind of startup. Crazy founders with an ambitious idea that involved not just changing the status quo, but redefining the idea of what it meant to communicate. I loved the product and its technology underpinning and I loved the simple notion that we should all be communicating with each other, all the time.

On August 29th 2003, Niklas Zennström and Janus Friis started the company and sometime thereafter I downloaded the software. A week later, I walked into my then boss Josh Quittner’s office and proclaimed to him, “this shit is going to be big.” I remember being so excited that I was visibly shaking; I had in one quick instant seen the future of communications, that software was going to be the new phone. It was such a sketchy little application and it came bundled with Kazaa; gnarly software by anyone’s standards. And it was developed by some dudes in Sweden.

Skype in browser

I wanted Business 2.0 to write about it, but like most of my pitches, it took some convincing. Of course, there was this guy, Dan Roth, who worked for our bigger sister publication, Fortune, who convinced his editors first and wrote the most definitive piece on Skype. I hated him for that for next few years but I did spend a long time following Skype like a hound. From the eBay merger to the ensuing drama and to the eventual spin-out and re-acquisition of the company by Microsoft, Skype was one of the greatest business stories of my twenty-plus year-long career following the technology industry.

It also was a company that helped me form deep friendships and great relationships.

The great disruptor

The unfortunate part of the Skype story is the story itself. The mergers, the drama and the corporate follies masked what I believe is one of the most disruptive internet companies of our time. Skype, if anything, is in the same league of companies — Amazon, Apple, Google, Facebook and Twitter — that changed the internet and in the process changed society itself. If Google democratized access to information, then Skype democratized the idea of communications.

Today when Marc Andreessen talks about how software is eating the world, the companies he evokes are merely parroting the playbook of Skype, which did eat the phone companies and thus set the template for the notion that software is eating the world. When people talk about network effects, they don’t remember that Skype had the ultimate network effect. When people boast about network-based communications, they are simply taking what Skype did and improving on it. Skype used P2P software and paved the path to collaborative consumption. If Amazon’s cloud services made it easy for startups to get in business, then Skype helped tiny startups go global and hire talent from across the planet. Today’s distributed workforces, for companies like Automattic (see disclosure), live on Skype.

The impact of Skype is reflected in a simple statistic: in 2012 it accounted for 167 billion minutes of international voice traffic. A Microsoft-Skype press release pointed out that “more than 1.4 trillion minutes of voice and video calls have been made using Skype. That’s the equivalent of more than 2.6 million years of conversations made in only ten years’ time!”

What’s the future?

As they say, the past isn’t really an accurate predictor of the future — and Skype’s future is looking increasingly murky.

Skype was about messaging, voice calls and later video calling. It worked because it was simple and easy to use. Today, it is neither. The elegant and minimal interface of the past is gone. Instead it has been replaced by an interface that can be described at best as clunky and cluttered.  Whenever I do need to use Skype these days, it is on my iPhone, where the user interface isn’t that bad.

Skype for Android Metro

About a year ago, I pointed out in a blog post that Skype, when it came to market, was virtually one of a kind. Today, many of its functions are being nibbled away by rivals — whether they are messaging upstarts, video conferencing startups such as UberConference or Google with its Hangouts.

Today, our office uses Google Hangouts for video. Messaging is free thanks to dozens of specialized apps. Phone calls are pretty darn cheap and in this age of smartphones, voice calls are for special and increasingly rare occasions. Skype has started to kill its app ecosystem. The cold embrace of Microsoft is slowly turning Skype into some strange mutation married to something called Microsoft Lync. The focus, of course, is the enterprise and “unified communications.”


It is simply too bad that Microsoft hasn’t realized what a powerful brand it had acquired. Skype as a brand represented a rebel, devoid of convention and totally free. It was about communicating with your network of friends and family. It was immensely social and modern.

Imagine if Microsoft called its Windows Mobile 7/8/whatever OS simply the SkypePhone, with Skype services – Qik, GroupMe, Skype IM, and Voice — as the core of its operating system. More than a billion people are familiar with the Skype icon. Even the Skype sign-in and incoming-call sounds are unique. Instead, Microsoft decided to superimpose a tired old brand — Windows — into a brand new market. Windows was never really personal in an intimate sort of way. Alas, for Microsoft, it was, and still is, a missed opportunity.

What happens to Skype next? I don’t know; its utility will trump its (lack of) experience and Microsoft’s meddling for a few more years, enough of a time for others to step in and fill the gap.

Until then, happy 10th birthday Skype. You changed my life and the lives of millions of others.

Disclosure: Automattic, the company that developed WordPress, is backed by True Ventures, a venture capital firm that is an investor in the parent company of GigaOM. Om Malik, founder of GigaOM, is also a venture partner at True.