The company Microsoft acquired for $8.5 billion in 2011 was Skype. Microsoft announced the purchase of Skype Communications on May 10, 2011, and completed the acquisition on October 13 of that year.
Skype had become one of the best-known internet communications services since its first release in 2003. It offered voice and video calls over the internet, instant messaging, file transfers, and paid calls to traditional landlines and mobile phones. The service was created by Niklas Zennström, Janus Friis, and a team of Estonian developers.
Microsoft made Skype a division of the company, with Skype's then-chief executive Tony Bates becoming its president. The acquisition also gave Microsoft a way to strengthen communications across Windows, Xbox, Office, and its business collaboration products. Skype gradually replaced Windows Live Messenger, Microsoft's older instant-messaging service, during 2013. Microsoft later retired Skype in May 2025, directing users toward Microsoft Teams.