Skype: What Went Wrong?
Skype pioneered internet calling with 170M users by 2011, sold to Microsoft for $8.5B, then collapsed when COVID created perfect conditions—Zoom captured 50% market share in months while Skype's 17-year head start evaporated. Fatal acquisition pattern repeated: buyers who didn't understand the business (Meg Whitman's imaginary eBay synergies, Ballmer's integration fantasies) overpaid while founders extracted maximum value. Peer-to-peer architecture became technical debt when mobile emerged. Microsoft's 2017 Snapchat clone destroyed brand equity—UK App Store ratings collapsed from 3.5 to 1 star. Eric Yuan built Zoom asking one question: "Does this deliver customer happiness?" Frictionless one-click meetings crushed Skype's account requirements and cluttered interface. Zoom exploded from 10M to 300M daily users during pandemic. Microsoft's $8.5B acquisition taught them video calling while burning shareholder value through strategic neglect. Teams reached 320M users while Skype withered to 36M. Shut down May 2025—acquirers who don't understand business mechanics consistently lose to sellers who do. 00:02:00 Peer-to-peer architecture bypassed central servers—more users improved performance, created virality where product growth drove friend invitations naturally 00:03:49 eBay's Meg Whitman paid $4.1B imagining buyer-seller voice synergies that never materialized—buyers didn't understand business mechanics 00:10:04 Skype's original peer-to-peer genius became Achilles heel—architecture designed for desktops couldn't handle mobile world, required rebuilding mid-flight 00:13:42 Skype had 32% market share, 17-year head start entering COVID—Zoom grew 30x in months, capturing 50% market share 00:14:46 Yuan built Zoom asking "does this deliver customer happiness"—frictionless one-click meetings versus Skype's account requirements destroyed brand
Not Rated Yet