Redmond Got Some Things Right in 2008

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Microsoft generated plenty of negative headlines in 2008. We watched as it struck out in its attempts to acquire Yahoo. And Microsoft-haters grew smug when the confusing Seinfeld-Gates commercials were quickly pulled and replaced with the "I'm a PC" campaign. Microsoft's attempts to out-market Apple and reverse the negative press of Windows Vista simply didn't work out.

Such debacles received the lion's share of press. But in reality the software giant had several successes. Most every other iteration of Windows had a strong year, either with good execution (Windows Server 2008, Windows XP) or good buzz (Windows 7, Windows Azure). And from the ashes of the Yahoo failure emerged some smart hires for Microsoft that could boost the company's search business and set the tone for a possible future deal with Yahoo.

Here are four areas where Microsoft executed well in 2008, areas that will help set up the company for success in '09.

Windows 7 Buzz

Microsoft did a good job of building anticipation for Windows 7 in 2008, and did so without the overpromising and overhyping that weighed down Vista's debut (thanks to "The Wow Starts Now" campaign) two years ago. It's clear the software giant has learned its lesson.

Microsoft has been forthright about Windows 7, creating a blog that documents operating systemâ¬"s progress. Microsoft also offered up demos and a pre-beta at PDC (professional developers conference)

Developers who liked the pre-beta praised features such as the revamped task bar, Aero Peek GUI and touch-screen capability, while those more skeptical said it was just Vista with a prettier interface. That debate will carry on in 2009.

But despite the mounting pressure on Windows 7, the campaign for it has been subtle so far-at least by Microsoft standards. With all the news about Vista's bad reputation and users downgrading to XP, Windows 7 has been pushed into the shadows a bit, which is probably fine with Microsoft as it quietly positions Windows 7 as a lean, customer-focused OS designed to handle any and all compatibility issues.

The OS is also being positioned-by pundits and the press more than Microsoft-as a savior for the ailing Vista, and many industry experts believe Windows 7 will ship in mid-2009 rather than the anticipated release of early 2010.

It's a lot to ask of an OS to be a panacea, but if Windows 7 is rock solid and ships in a timely fashion, it could smooth over a lot of negative perceptions about Vista ... and Microsoft itself.

Hiring Yahoo Talent

If you can't buy 'em, hire 'em.

Microsoft's failed attempts to buy all or part of Yahoo dragged on for most of 2008. Much of it was an embarrassment for both companies, but Microsoft's recent hiring of Yahoo's top search talent is turning out to be a smart move.

It's likely that the November departure of Yahoo CEO Jerry Yang opened the doors for Microsoft to start interviewing Yahoo-ites. By early December, Microsoft had hired Yahoo search chief Qu Li to run its online services group and Yahoo search VP Sean Suchter to be the GM of Microsoft's Silicon Valley Search Technology Center.

No two men, no matter how smart, will be able to pull Microsoft Live Search out of its distant third-place search ranking any time soon. But losing top talent to the company trying to take you over will chip away at Yahoo's already flimsy morale.

Also, having top search technologists like Li and Suchter on board will make for a smoother transition if Microsoft does indeed buy Yahoo's search business, an idea that Microsoft CEO Steve Ballmer mentions seemingly every other week.

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