Investing

Skype's Demise Shows A Great Idea Can Still Loose Billions of Dollars, And Investors Need to Think About Their OpenAI Position Next

Austin Smith

Published: March 13, 2025 12:21 pm

24/7 Wall St. Key Points:

• Microsoft (NASDAQ: MSFT) acquired Skype for $8 billion, but it failed to capitalize on its early lead in video communication due to a lack of a sustainable business model.
• Skype’s demise highlights how pioneering technology does not always translate into long-term success, as later entrants like Zoom (NASDAQ: ZM) built more effective monetization strategies.
• The history of tech failures, such as early social media platforms like TheGlobe.com, shows that innovation alone is not enough without strong execution and market adaptation.
• Nvidia (Nasdaq: NVDA) generated incredible wealth for early investors, and even $1,000 in ‘The Next Nvidia Stocks’ could do the same. The recent pull back may be the best opportunity to load up investors will get. Click here to see the stocks now (it’s free).

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Transcript:

[00:00:04] Doug McIntyre: I used to use Skype. Skype was, Zoom before Zoom. Messenger, before messenger, right? Microsoft bought it, I think about 25 years ago something like that for eight billion dollars And it seemed like it was going to be because there were tens of millions of people who used it and it was basically free. Free video

[00:00:27] Lee Jackson: And they also started using internet protocol as a way to transmit it rather than, other means of transmission.

[00:00:37] Lee Jackson: And that was, I think it was, I think it, let’s see, it’s been in, it’s been 21 years. You were right. 21 years since they, they bought ’em.

[00:00:45] Doug McIntyre: Well, that’s an example of a big company making a big mistake. Buying something that ended up being a great idea. It’s just the thing that they bought was not, the great idea going forward.

[00:00:58] Doug McIntyre: It ended up being other forms of what I would describe as video conferencing that do use the internet. Skype never made it. And I don’t, I think the reason Skype never made it is they never had a business plan. They had a very attractive product, but they never figured out a way to make any money on it.

[00:01:17] Lee Jackson: Yeah, they never did monetize it Really and I think that was the problem and although they probably had to continue to pour R&D into it. So it would be competitive in this, super fast internet world and that was probably it and I think if you ask somebody 35 years old. They may not even ever heard of Skype,

[00:01:40] Lee Jackson: So it’s out the door after 21 years and, may, it rest in peace in the Wall Street graveyard.

[00:01:49] Doug McIntyre: Yeah, but it is a predecessor to things like Zoom. So it’s one of those things that you can look back historically and say, this was a really good business, but it was ahead of its time.

[00:02:01] Lee Jackson: Yeah, it was ahead of its time. And it’s not the first thing that was like that. There was websites around the turn of the century that were very similar to Facebook (NASDAQ: META).

[00:02:13] Lee Jackson: Very similar. Oh yeah. A lot of them. There was a hot IPO that I did when I was still a broker called theglobe.com. I remember. It was priced at 7 and opened at 90. And my clients were extremely happy back in the day. But it was literally, you can get on and share stuff with friends just like, just like Facebook, but it never got off the ground and it went to zero,