From the wsj -
"For the past several years, Microsoft has been stung by missteps, including a clumsy defeat last year in Mr. Ballmer's unsolicited bid to acquire all of Yahoo. Microsoft's Windows Vista operating system was pilloried for technical problems, and its videogame ambitions were nearly thwarted by widespread malfunctions of its Xbox 360 console.
Yet amid the bad news, there are signs that things may be finally starting to look up for Microsoft.
Reviewers are praising the test version of its Windows 7, which will go on sale in final form Oct. 22. Microsoft's Xbox business is getting buzz for innovation. Its new search engine, called Bing, has earned plaudits and market share since it launched last month.
"Suddenly you don't feel like a moron for saying you use a Microsoft product," says Keith Richman, chief executive of Internet video site Break.com and a fan of Bing.
And now Mr. Ballmer, Microsoft's CEO, has reached a deal with Yahoo that, if successful, could give him a big boost in his company's rivalry with Google. Under their 10-year agreement, Microsoft's Bing will become the Internet search service on Yahoo, while Yahoo will sell advertisements that run next to the search results to large companies on behalf of both Microsoft and Yahoo. The agreement could catapult Microsoft's share of online searches conducted by U.S. consumers to nearly 30% from just over 8.4%, compared with Google's 65% of the market, based on market estimates by Comscore Inc.
One of the most telling came earlier this month, on Mini-Microsoft, a blog written by an anonymous Microsoft employee in product management that is popular with company employees. For the past five years, the author has slammed Microsoft as a flabby, inefficient bureaucracy losing ground, but Windows 7, Bing and other recent efforts changed his mind. "I've got to say: in my opinion, Microsoft has turned The Corner," he wrote. "