Microsoft’s Summer of Love: A Roundup of the Company’s Hottest Deals and Other News

It’s been quite a summer here in Seattle, with record droughts and a heat wave that left us all panting in line for an iced coffee. But despite a cool economic climate, Microsoft managed to stay as hot as the temperature outside its Redmond, WA, headquarters, with a series of big deals and other announcements that kept everyone sweating to keep up.

Here’s a rundown of the most important news from the software giant’s eventful summer:

—Microsoft started the season off with a bang, or rather a Bing, when it launched its new search engine at the end of May. Bing didn’t stop making headlines with its launch, forming a partnership with salary comparison technology startup PayScale in June and adding a limited Twitter search feature in early July. As Bing clambered up the search engine ladder, Greg spoke with Harry Shum, the vice president who runs the engineering team that created Bing, about why Bing is already doing so well.

—Bing’s debut had even stronger echoes than might have been expected. It appeared to help close a long-rumored deal with Yahoo in July that puts Bing technology behind Yahoo search for at least a decade. Microsoft had already hired away three search executives from Yahoo at the end of June before the partnership, which leaves Yahoo in charge of sales and distribution of advertising for both websites, as well as receiving a fair chunk of change.

—Microsoft expanded further into a new area this summer: life sciences, with the purchase of the Seattle-based assets of Rosetta Biosoftware from Merck, integrating it into its new Amalga Life Sciences platform. Rosetta’s technology analyzes how genes turn on and off, and will be added to Amalga’s genomic data analysis program. This represents Microsoft’s first real push into biotechnology after years of looking for ways into the market, as Luke reported. In another research-related move, Microsoft unveiled Trident, a scientific analysis tool to help researchers and businesses sort through and make sense of massive amounts of information quickly.

—In a deal as big as any launch this summer, Microsoft sold its digital advertising company Razorfish to French advertising firm Publicis just a few weeks ago for about $530 million, and signed a five-year strategic alliance with Publicis. Razorfish executives are looking forward to the more global reach that Publicis assures them, while Publicis gets a huge leg up in the digital marketing arena since Razorfish is already the largest company of its kind in the world. Online strategy expert Warren Gouk told Greg that the partnership could help out Microsoft a lot too, pushing up its advertising business.

—Microsoft made another European friend this summer, teaming up with Finland-based Nokia to adapt Microsoft programs to Nokia’s smartphones. The Symbian operating system created by Nokia has been a rival to Microsoft’s mobile OS, but putting its programs on Nokia’s phones helps Microsoft compete against Google, whose own mobile productivity programs have been chipping away at Microsoft’s market share.

—On a lighter note, Microsoft generated a lot of excitement at this year’s E3 expo with the demonstration of Natal, a new motion-capture system for the Xbox 360 that works without needing any goggles or other special equipment. There was also an announcement and demonstration of how players can use Facebook and Twitter on their consoles to communicate with friends while they play.

And looking ahead, Microsoft seems to be just warming up, with the upcoming October launch of Windows 7, which promises to fix Vista’s woes and improve upon its good qualities. It remains to be seen how well the new OS will be received, especially considering the chilly dismissal of Windows 7 as a rival by Apple in its announcement of its own new OS, Snow Leopard, set to launch just a month before Windows.

Eric Hal Schwartz was an intern in Xconomy's Seattle office. Follow @

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