How Zoom overtook Skype as the video chat app of choice
For two decades, Skype was a verb, like “vacuuming” or “Googling something”. In 2011, it was purchased by Microsoft Power. So with years of honing its craft and decent capital behind it, when people started working from home, Skype should have become the video conferencing platform. Two years later, however, we are “zooming” people rather than “skyping” them.
Take away the story and the reason for Zoom’s recent prominence is quite simple: it’s a very stable and reliable video platform, and it’s easy to access, easy to use, and free of unnecessary features.
These are actually some of the reasons that persuaded Microsoft to pay $8.5 billion for Skype a decade ago. By this point, Skype had already gone through a few owners, including its misfit purchase by eBay in 2005. Arguably, this lack of continuity in ownership would prove part of its downfall.
Although a fairly simple video conferencing platform, Skype was a pretty sexy brand – it had 100 million users, eight million paying customers and, well, talking to people on a video screen. was the novelty.
With commercial use still reserved for the elite, anyone with a relative overseas can remember the excitement of being able to see and talk to him over the internet. In those early days, Skype was way ahead of its competitors in terms of quality and service. You would “Skype” your mom on her birthday, rather than the standard Sunday phone call.
Despite these mundane uses, Microsoft hoped some of this perceived halo of sexiness would rub off onto its own gray brand. However, when he failed to transfer, the company began to create sparks. In a bid to compete with the rapidly emerging WhatsApp and Snapchat offerings, Skype has started to introduce hip features and emojis aimed at younger audiences.
By sprucing up the interface, Microsoft began to lose sight of the basic core service that Skype had been bought to provide. Zoom, on the other hand, was working hard to make its platform more stable and reliable.
If it doesn’t publicly admit it had a problem with Skype, Microsoft has certainly started hedging its bets internally. Teams, which launched in 2016 as a workplace rival to Slack, had built-in video calls. The following year, Microsoft went public when it announced that Teams would replace Skype in business. Two years later, it was announced that Teams would also replace Skype for consumers.
Had the pandemic hit before 2017, Skype might have won despite its increasingly apparent limitations, but by early 2020 Zoom had gained traction in the mainstream.
Before the pandemic, the WFH was not populated with many Zoom calls – instead, it was seen by most as a quiet day of undisturbed work on a report or presentation; bit of a sanity day, with a few phone calls and lots of emails.
But when everyone suddenly went home to work in 2020, things changed. Like most industries, COVID-19 was not the only reason for change, but it was certainly the catalyst for acceleration. People had slowly moved away from Skype over the previous five years, and the virus swept away like a tsunami as multi-user calls, multiple times a day, became the norm.
While Eric Yuan’s Zoom now dominates the market, Microsoft Teams and Google Meet are still ahead of Skype in terms of market share. Zoom is definitely the preferred choice for the less tech-literate, who want something that’s easy to set up, spam-free, and doesn’t give up too often.
Really, it’s a lesson for a large organization that acquires a business for the right reasons and then tries to turn the product into something else. It lost focus on the core values that made the product so popular in the first place and tried to emulate the competition rather than lead it.
Seven big brands that blew it up
Many believe that the camera film company was completely oblivious to digital photography, but in fact Kodak invented it. Steven Sasson, an engineer at Kodak, invented the first filmless camera in 1975. However, the company denied the threat to its motion picture business. Not wanting to turn into a digital model, Kodak instead used digital technology to try and improve their film cameras.
An early leader in the smartphone revolution, BlackBerry stopped making phones in September 2018, when Apple, Samsung and others left it with just 0.3% of the market. Not embracing touchscreen technology has led to clunky designs with unnecessary and inflexible keyboard space. Lack of innovation is not something you can sustain in the dynamic mobile market.
Like the Jeep, the Hummer was a civilian incarnation of a military vehicle – the Humvee, which was used extensively during the 1991 Gulf War. With its oversized boxy shape and famous owners such as Britney Spears, it became an icon of the late 1990s. Anti-war sentiment, environmental groups and an overly violent reaction began to fade away. It was phased out in 2010, however, a new Hummer EV is due out later this year.
Once the most popular website in the world, Yahoo! missed the opportunity to buy Google twice, had a failed bid to acquire Facebook and also suffered a data breach for 500 million of its users. In fact, it failed to focus on its general users, with a lack of interface innovation and intrusive advertising. If you want to read the whole story, go to Google…
One of the premier social media platforms of the early 2000s, not only was it overtaken by Facebook’s superior product offering, but its bid to compete was crippled by the $580 million acquisition by News Corp. Bogged down by corporate politics and demands for income from the media giant, he lost his nimble and creative roots. News Corp sold it to Time for around US$35 million in 2011.
The Finnish giant overtook Motorola in 1998 as the world’s largest mobile phone maker. It had already launched the first Internet-enabled mobile phone and a prototype touch screen. Like BlackBerry, however, Nokia failed to embrace the Android revolution and settled for a keyboard. After realizing that he misjudged market trends, the backlash with his own Symbian system came too late to catch up with Apple and Samsung.
Documentary The latest blockbuster Well Worth a Watch, telling how the video rental store went from 9,000 stores to just one, though obviously you’d have to stream it on Netflix, rather than rent the video or DVD. In fact, Blockbuster had the opportunity to buy Netflix for US$50 million in 2000 (it’s now worth around US$270.9 billion), but literally laughed at the proposition.