This list begins with a startup that dared to go up against the internet giants. Baidu, the king of Chinese search (60% market share in 2007) has features which are customized for locals. Cofounder Robin Li is convinced that Baidu will "become bigger than Google," and he's in a hurry to get there: He recently launched a Japanese search engine, introduced search for ad-supported streaming music, and was first to offer mobile search in China.

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"What we're really trying to do is to create an eBay for money and credit," says Chris Larsen, CEO of two-year-old Prosper.com (and founder of E-Loan, which he sold in 2005). The company melds the debt market with online social networking, allowing people to borrow money from one another--and lend it--without any banks in the middle. So far, Prosper has facilitated the transfer of more than $100 million. Borrowers include stretched homeowners, college-goers, credit-card junkies, and entrepreneurs; lenders are average folks, including Larsen himself (who has funded more than 450 loans).

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Most interactive-ad shops master either the creative or the technical; AKQA is expert at both. Whether building a Pixar-quality interactive online universe for Coke's breathtaking "Happiness Factory" campaign, or masterminding an "alternate reality game" for Microsoft's Halo 3, the digital powerhouse doesn't just dream up mind-bending ideas, it actually writes the code that brings them to life. Which is why, after five consecutive years of profitability, AKQA is one of the most dangerous global forces in the industry. While ad holding companies and tech firms spent billions in 2007 to snap up digital shops, AKQA fended them off, opting instead for a $250 million investment from private-equity firm General Atlantic. In the meantime, the 700-person agency boosted revenues 39% to $100 million.

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Within the first 10 days of 2008, Ratan Tata, the magnate behind India's $72.8 billion Tata Group, made a reported $2 billion bid for Ford's Jaguar and Land Rover brands and unveiled its long anticipated $2,500 "People's Car" called "Nano." India's largest conglomerate made a clear statement that Indian business is not just an outsourcing ghetto. It wasn't the first time that Tata the man, the fifth generation of his family to run the company, had demonstrated his global savvy. In the 1990s, when he took the helm of the company, its trucking unit was enduring the biggest losses in Indian history. Since then, through a series of international acquisitions (Tetley Teas, steelmaker Corus), the 70-year-old mogul has transformed the company into a mosaic of 100 diverse businesses, with more than half of the company's revenue coming from non-Indian operations.

The opening of the new $275 million BMW Welt (BMW World) in Munich was a high-water mark for the automaker's marketing department. Some 1 million pilgrims a year are expected to push their noses to the glass; 45,000 customers will pick up their cars here. But there's a better reason BMW remains the world's number-one premium marque. After overhauling its much-lamented onboard computer, the company has refocused on what's important: the badass automobile. Look for the $30,000 rear-wheel-drive 1- series coupe (debuting in the United States this year), the 2008 Mini Clubman (a super-sized version of the Cooper), and, most impressive, the prototype Hydrogen 7. Yes, Honda has a hydrogen car too, too--but if you're going to be stranded by the roadside for lack of H, wouldn't you rather it be in a BMW?

Datacenters account for some three percent of total world energy use, and Sun has taken that as a challenge. Last year its mad-scientist approach to energy efficiency--and $2 billion R&D budget--rippled across the industry as the company released the world's most efficient processor, the UltraSPARC T2; Project Blackbox, the first virtualized datacenter; and a new, super-green Silicon Valley datacenter that increases computer power by 456% while cutting energy costs by more than 60%. With four straight profitable quarters for the first time since 2001 and 6% growth, the forecast is sunny.

"We wanted to democratize television," Al Gore told us last summer, of his quest to create a cable network that piped content pitched to--and created by--young people. But if the initial idea was Gore's, credit for Current TV's subsequent traction goes to CEO Joel Hyatt. Launched in August 2005, Current became profitable in 18 months. "I knew nothing, and I mean nothing, about the cable industry," Hyatt says. But that ignorance freed his team to dream big, and by the end of 2007, more than a third of Current programming was being created by viewers and delivered to Current via the Web. Hyatt reinvented the ad model as well, inviting the likes of Sony and Toyota to tap his audience's creativity; to date, 42 viewer-generated ad spots have aired.

Seven years ago, former music exec Tony Fernandes paid 25 cents for an ailing carrier with two creaky planes and $12 million in debt. Today, AirAsia's bottom-of-the-pyramid strategy has created one of the world's fastest-growing, most-profitable carriers, with the lowest operating costs in the industry and fares as cheap as $3. "It's like our bus," says Yap Choo Ying, who runs a market stall in eastern Malaysia and now regularly jets to Kuala Lumpur to see her grandkids. In November, the Malaysian company startled analysts by going long-haul, adding flights to Australia; this year, it will add flights to China and India, where billions more people have yet to take to the skies.

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In 2005 Matt Rubel took the helm of the $3.5 billion company and decided it needed a design intervention. While the 4,500-store chain had thrived for years on the low-price, self-service model Payless pioneered in the 1950s, the last decade saw the company losing to heavyweights such as Wal-Mart. So, Rubel injected better design into every arm of the company. Last year, he built its first design studio. Taking a cue from fashion democratizers like Target and H&M, he's lured up-and-comers to design exclusive shoe and handbag lines. And he's given a 21st-century facelift to the chain's time-capsuled, 1970s-hued stores. Rubel isn't stopping the makeover there. Last spring, Payless made two major acquisitions: $91 million for Collective Licensing, a brand management company that owns names like Airwalk and American Eagle, and $800 million for Stride Rite, whose brands include Keds and Saucony.

Critics like to crow about Redmond's stumbles. The struggling Zune. The Xbox 360's "red ring of death." And as for Vista, well, cue the clearing of throats. Then again, ever hear of a little game called Halo 3? And by the way, Microsoft's stock was up about 20 percent in 2007, on the continued dominance of Windows and Office. Maybe the biggest surprise to emerge out of the PR squall was the tabletop computer Surface, a foray into multitouch technology that rivals the iPhone in coolness.

When Beowulf hit theaters in November, it marked the dawn of the next--some say ultimate--wave of 3-D movies. Making the display possible was a California startup called Real D, whose technology uses circularly polarized light from digital projectors and doesn't cause the eye fatigue of the old 3-D. Theaters are banking that the technology will stop the box-office slide, and Hollywood's biggest players have projects in the pipeline. That's not enough for Real D: "Our view is that 3-D images change the business on all visual displays," says CEO Michael Lewis, who envisions Real D at home and even on mobile screens. The company is already experimenting with alternative content, from multiplayer in-theater videogames to an NBA game converted into 3-D in real-time. A U2 3-D concert film hits theaters this month.

Despite an uncharacteristic slip in quality ratings, 2007 will go down as a historic year for Toyota, its 50th in the United States. The company had 16 percent of the American market--more than double its share 10 years ago--and passed Ford to take the number two spot in U.S. car sales. The company unveiled its next-gen Prius (due in 2010), a plug-in with a carbon-fiber body, but ironically its highest profile innovation was the redesigned Tundra pickup. Toyota sold 3,800 of the jumbo 18 mpg trucks per week this year--300 more than Prius.

Most companies don't change the world even once. With its role in technologies that light our homes, reduce air pollution, and entertain us, Corning has transformed our lives repeatedly. This year marks the 100th anniversary of Corning's storied R&D operation, now called "Sullivan Park," after Eugene Sullivan, who created the first lab and cultivated the firm's innovative culture. Corning now spends more than $2 million each workday on R&D, employing 1,800 researchers and a process that's both rigorously disciplined and near Google-like in its openness. That's how it has democratized technology over the past century, bringing lightbulbs to ordinary people and light-speed communication nine decades later.

Back in the dotcom boom-boom days, Cisco Systems was synonymous with back-end infrastructure. It built devices consumers never saw that connected Internet servers and made the information superhighway run at autobahn speed. But growth stopped with the crash. Today, the company's Linksys brand is selling phones and webcams in addition to its ubiquitous wireless products. And by employing the same Ethernet strategy it used in the '90s, Cisco now plans to use its Scientific Atlanta TV-set-top box to network home computers, entertainment systems, and phones. All to the tune of $3.5 billion in sales a year. What's more, last year Cisco unveiled a videoconference technology called TelePresence 3000. In its debut year, TelePresence was installed in over 40 countries. Now the company is building a family-friendly version it hopes will one day complete the home entertainment-communication loop and make "Cisco" a household name.

Sure, CEO John Mackey got spanked this year for his anonymous posts on message boards, but the real Whole Foods story remains its relentless drive to raise the bar in terms of the foods it offers, their presentation, and how the food got to the store. Whole Foods' innovations foster social responsibility--such as a new "animal welfare" product rating system, which rolls out companywide this year. Perhaps the most innovative Whole Foods effort of the past year was a loan program for its food suppliers. The company, which will pass $7 billion in sales in 2008, created a pool of $10 million per year to provide low interest loans to small food producers, to encourage the local agricultural movement.

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The earth is warming. The snow is vanishing. So Burton snowboards now owns ... a surfboard manufacturer, Channel Islands. A year after that 2006 purchase, Burton opened a 11,500-square-foot combo surf, skate, and snow mega-store on L.A.'s Melrose Avenue, part of a strategy for breaking down the vertical boundaries that traditionally separated the categories--and for rolling out product year-round in the process. And roll it out Burton does: some 45,000 different items, each replaced annually. We're not sure if it offers a Greenland long board yet, but for Burton, there is no bad weather.

Intel had a rough 2006: Its slipping market share forced layoffs, a reorg, and a complete overhaul of its chip offerings. But adversity fired Intel's competitive metabolism (even if it did torch a feel-good partnership with Nicholas Negroponte's One Laptop Per Child, which Intel came to see as a competitor to its own Classmate PC). By the end of 2007, Intel had 83 percent market share and a new 45-nanometer core processor that has double the number of transistors and uses 30 percent less energy.

A lot of fuss was made when Live Nation signed Madonna to a $120 million deal last year. The rather threadbare Material Girl dropped Warner--her label of 25 years, which still owns her catalog and will get two more albums--and made the Clear Channel spinoff her exclusive music partner: record label, concert promoter, ticket vendor, and merch agent. The usual phrases were thrown around: "paradigm shift," "artist empowerment," "death of the label." But the real big news is what comes next. Live Nation plans to go solo and end its partnership with Ticketmaster at the end of this year. In doing so, it will break up a long-running monopoly, keep lucrative ticket fees for itself, and cut Ticketmaster off from key customer data. "Forty million fans were coming to our door and we let Ticketmaster have their addresses and e-mail," says Live Nation CEO Michael Rapino. "That's ludicrous."

In 2007, Wal-Mart came to symbolize the power of corporate environmental transformation. Most famously, the company doubled the U.S. market for energy-saving CFL bulbs, selling 100 million in nine months. It rolled out an online system for tracking how its suppliers reduce their packaging, launched a nationwide program to teach employees about sustainability, installed solar systems on some stores and warehouses ... the list goes on. But there's also this: In 2007, Wal-Mart hit sales of $1 billion a day, a world record. It was only in 1980 that Wal-Mart broke $1 billion a year.

IRobot founders met at MIT: Chairman Helen Greiner and CEO Colin Angle were undergrads together; CTO Rod Brooks was Angle's thesis adviser. Ultimately, the trio decided they wanted to build robots that real people could use. "The challenge was that robots cost more to build than they delivered in value," Angle says. The team went into business in 1990. Government and university projects sustained them initially, but they were strapped for cash. While Greiner deepened the company's military relationships, Angle spearheaded the consumer division. IRobot spent part of the 1990s making industrial cleaning robots for SC Johnson and toys for Hasbro; when both contracts expired, Grenier and Angle combined what they'd learned into the Roomba. The company raised $38 million in investor cash in 1998, started developing the digital domestic in 1999, and debuted its first version in 2002. The Roomba now accounts for around two percent of the vacuum market.

Omniture is like an intelligence upgrade for the Web. It provides thousands of clients, from Bank of America to JetBlue, with real-time information about how visitors use their Websites; those visitors, meanwhile, find an increasingly personal experience rooted in previous behavior and interest. And the data derived from this sort of high-I.Q. interaction has made Omniture an essential tool for improving the return on online ad spending. Last year, it managed $500 million in keyword spending that led to $10 billion in actual commerce. "We want to change the online experience," CEO Josh James says. "If consumers are happy, everyone is happy." James certainly is: Omniture grew about 80 percent in 2007, with sales topping $140 million.

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Early on, LG, then a tiny Korean electronics manufacturer, was known as the "Lucky Group." It sure looks that way now: Half a century old, LG is one of the world's biggest producers of cell-phone handsets, air conditioners, frontloading washing machines, DVD players, and flat-panel TVs, and has gone from near-anonymity just three years ago to $11.5 billion in North American sales in 2007. LG's killer app, slated for a 2009 release, is rumored to be a mobile TV, dubbed "MPH," that can pick up robust digital high-def broadcasts--even from the backseat of a car going 100 miles per hour.

Not long ago, Boeing seemed destined for a future of eating Airbus's jetwash. But the 787 Dreamliner put the Seattle jumbo back in contention. Fifty percent of the Dreamliner's fuselage is built of lightweight composite materials, helping shave 20 percent off fuel consumption. The 787 is also 60 percent quieter than similar planes and emits cleaner exhaust.

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Inside, higher cabin pressure and humidity better imitate life on the ground; lighting that can adjust with time zone shifts could eliminate the headaches, dry mouth, and the general misery of the long-haul hangover. By January 1st, 55 customers had ordered more than 800 Dreamliners, making it the fastest-selling commercial jet ever.

"There should never be a day when you don't have your music wherever you are," says Michael Bloom, president of Rhapsody, RealNetworks' subscription-music service. As a PC-tethered offering, Rhapsody couldn't overcome a century of ingrained music-buying behavior. But with its DNA now embedded in MTV, Facebook, and tech gadgets from TiVo to Nokia Internet tablets to Verizon VCast cell phones (coming soon), Rhapsody's ubiquity is starting to seem inevitable.

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The first product to emerge from Herman Miller's secret R&D lab in Michigan just over a year ago had nothing to do with the company's signature Aeron chairs or modular office furniture. Convia Programmable Infrastructure transforms the way companies install electrical systems, letting you reconfigure an entire building--lighting, outlets, even heat and A/C--with only a two-button point-and-click wand. The result? Not just flexibility in managing space, but up to 30 percent energy savings. Times are good at Herman Miller: Among the dozens of fresh developments in 2007 were a personal climate control unit adapted from automotive technology and a voice privacy system that garbles cell phone users' voices to the ears of random passersby. Coming soon: office furniture with built-in cordless charging technology.

Since 1982, designers, engineers, and architects have made Autodesk's 2-D AutoCAD drafting programs the de facto choice for creating anything from buildings to Windsurfers. Last year, sales grew by more than 20 percent, and revenues reached $1.84 billion. Now Autodesk is targeting the latest growth area in product design: 3-D virtual prototyping that eliminates the need for building physical models. With the company's Inventor software, not only can designers create a visual rendering to show how a product will look, but they can also subject it to tests that show how different elements will respond to gravity, force, or torque. What's more, where competitors' forays into 3-D prototyping were prohibitively expensive and hard to use, Inventor costs $5,300 and uses click-and-drag functionality that allows objects to be changed, redrawn, and saved as easily as in a Word document.

Anomaly shirks categorization altogether. In 2004, five former colleagues from Chiat\Day and Wieden+Kennedy built a new kind of company: part branding firm, part design shop, part innovation think tank, part VC firm. Most ad agencies still earn their paychecks from time sheets and media spend, which motivates them to be inefficient and produce ideas that are wedded to expensive media. Anomaly takes a different approach, negotiating upfront either a predetermined fee or, better yet, royalties or an equity stake in a product. So when a client comes to it with an advertising problem, it addresses it as a business problem, analyzing everything from design to product development. In 2007, Anomaly brought in nearly $20 million with new clients including Converse and Bluetooth headset maker Jawbone. New businesses it has launched include Avec Eric, a culinary line with Le Bernardin chef Eric Ripert; Eu, a high-end skin care line with former Neutrogena biochemist Tammy Ha; and EOS, a mass-market skincare line.

Founded 62 years ago, Arup is the graybeard of eco-sensitive engineering and design; its work represents a world tour of avant-garde architecture--Paris's Pompidou Center, the Sydney Opera House, the London Eye. Arup's latest work is no less ambitious: A massive Beijing airport expansion will accommodate 90 million passengers in time for the Olympics; an eco-village in England will include zero-carbon homes; a "personal rapid transit" system will shuttle Heathrow passengers in battery-powered, driverless pods. Arup now has projects in 160 countries, but its Google-like governing philosophy (set down 38 years ago by founder Sir Ove Arup, a Danish philosopher and engineer) remains constant: "Our pursuit of quality should in itself be useful."

IBM racked up more U.S. patents in 2007 than any other company--for the 15th year in a row. It also celebrated the first anniversary of InnovationJam: CEO Sam Palmisano pledged $100 million for the best ideas at the companywide brainstorm; he ultimately funded 10 of the 37,000 submitted, including five entirely new businesses. "Everyone's trying to figure out the holy grail of collaborative innovation," says IBM VP David Yaun. So now IBM is selling the Innovation-Jam methodology itself.

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Rather than just going carbon neutral (which it aims to do by 2010) or using sustainable materials (which it does in everything from its products and packaging to its factories and stores), New Hampshire-based Timberland has taken the bully pulpit in its environmental efforts, leading the way to greater responsibility even as it struggles financially. The company aims to influence its consumers' and employees' behavior with big benefits for hybrid-car buyers, community-service incentives, green scorecards on its products, a green ad campaign ... the list goes on.

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The efficiency of Ausra's solar technology is unparalleled: mass-produced mirror clusters focus the sun's rays onto water-filled tubes. When the water boils, it produces enough steam to turn an array of turbines. Fishman estimates the electricity generated will cost 10 to 12 cents per kilowatt-hour--on par with polluting sources like coal, and 50 percent less than photovoltaic power. VC extraordinaire Vinod Khosla invested $25 million in Ausra last year, a colossal vote of confidence that has proven contagious. In November 2007, Pacific Gas & Electric signed a 20-year purchasing agreement with the company that will generate more than $1 billion in revenue (Ausra's first California plant is slated to be up by 2010), and Ausra officials are in talks with utilities in Florida and Nevada. "I don't think it's out of the question for us to get 30 percent of the national grid within 20 years," Fishman says.

Two or three times a week since November, a Fresh & Easy has opened in California, Arizona, or Nevada--part of a 1,000-store, five-year plan envisioned by the chain's British parent, Tesco, the world's third largest retailer. If Tesco's past is precedent, the U.S. grocery business ought to pay attention: Tesco has quashed challenges from Wal-Mart in the U.K., and overseas expansion is its biggest growth generator. With more selection than a 7-Eleven but less than a standard supermarket, Fresh & Easy is geared toward the typical American shopper who buys only a few hundred products. The company plans to keep costs low by centralizing distribution, selling more store-brand items, and relying solely on automated checkout. By 2011, sales are projected to reach $4 billion, according to TNS Retail Forward.

When CEO Mark Hurd took over the demoralized post-Carly Fiorina company in 2005, he knew it would be a messy job--and that was before the spying scandal. But in just two years, HP has stolen Dell's leadership in the PC market, tripled its stock price, and grabbed some heat with an ad campaign that uses Gwen Stefani and Jay-Z as pitchmen. Then there are the new products, such as Blackbird 002, an extreme-performance gaming computer that has opened a new market for high-margin, premium PCs.

Target's strategy of rolling out capsule collections by well-known designers has kept the store's fashion merch leading the trends. In 2008, that strategy will take the form of a vintage-inspired sports apparel and footwear line with Converse, and in a line of bedding, linens, and baby goods designed by StudioDwell. But Target's appetite for hip design now extends all the way to its marketing initiatives, such as 2007's "model-less" fashion show at New York's Grand Central Terminal (think holograms strutting down virtual runways) and a 2005 "vertical fashion show" at Rockefeller Center. Internally, the company encourages non-big-box thinking with a quarterly Big Idea contest. Winners get a cash prize and a chance to see their ideas brought to life.

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The company makes ecologically sound cleaning products. Last February, Method, launched an assault against Procter & Gamble's blockbuster Swiffer. Method's Omop, a sleek silver reusable mop, employs sweeping cloths made from corn-based plastic (PLA). Instead of clogging landfills, they're 100% compostable. Two years ago, they rolled out dryer sheets that use plant-based oil instead of the industry standard, beef fat. Method had a triple-concentrated laundry detergent a full two years before Unilever and P&G started crowing about all the water and shipping waste they would eliminate with their new concentrated detergents. Meanwhile, Method's were also nontoxic, biodegradable, and with packages more MoMA than Kmart.

The world's first bendable OLED screen. An ultrathin double-sided LCD. A solid-state drive to replace the hard disk in your laptop. And soon, in a collaboration with game company Reactrix: a TV that lets viewers move what's on the screen with the wave of a hand. Just a few developments from the world's largest consumer-electronics company.

Two years into the job, CEO Bob Iger continues to mold Disney into the digital-media innovator to watch. ABC was the first network to sell TV episodes on iTunes and to stream them for free on its Web site. Pirates of the Caribbean and High School Musical showed multiplatform agility. And Pixar's latest hit, Ratatouille, was a masterful blend of technical innovation, artistry, and narrative that evoked Walt's magic. Pixar cofounder Ed Catmull, now president of Pixar and Disney Animation Studios, is encouraging the Big Mouse to rediscover and build on its rich tradition.

Imagine going in for a half-hour doctor's visit and coming out with a treatment plan tailored to your unique genetic blueprint. That's the vision at Santa Clara, California-based Affymetrix, which makes lab tests that scan tissue samples for variations in thousands of genes. The company banked an estimated $405 million in revenue last year, spurred by its AmpliChip test--developed in partnership with Roche Diagnostics--which identifies people who metabolize drugs slowly. Now the race is on to develop tests for genetic predisposition to heart disease and the most common types of cancer.

As if buying MySpace didn't cement News Corp. as a maverick, Murdoch & Co. last year pledged to go carbon neutral by 2010, launched the Fox Business Network, and, oh yeah, snapped up Dow Jones and The Wall Street Journal.

When Procter & Gamble's stock tanked by more than half in 2000, CEO A.G. Lafley knew he was facing the dilemma of giant companies everywhere: Despite pouring money into R&D, P&G couldn't create new products fast enough to keep growing. The only way out, Lafley realized, was to innovate innovation. So he launched the Connect + Develop program, which allows outside developers to get their concepts and designs into P&G's product pipeline. An applicator developed by Cardinal Health (now Catalent), for example, helped P&G launch Olay Regenerist Eye Derma-Pods, now its top-selling skin-care item. Today, 42 percent of P&G products have an externally sourced component. And this giant is growing: revenues rose eight percent, to $78 billion last fiscal year, while profits climbed 14 percent, to $11 billion.

After Sony and Microsoft kicked the Mario out of Nintendo's GameCube in the Video Game War of 2001, the cutest and smallest of the three platform makers needed a new plan. "Nintendo took a step back from the technology arms race and chose to focus on the fun of playing, rather than cold tech specs," says Reggie Fils-Aimé, president of Nintendo of America. The resulting Wii system, with its intuitive motion-sensitive controller, appealed not only to teen boys but also to their sisters, moms, and dads. In 2007, Wii outsold both the PlayStation 3 and Xbox 360. The company's stock has more than doubled over the past year. Nintendo's upset is doing more than attracting new gamers and bruising Sony and Microsoft. Says Sega of America president Simon Jeffery, "It has opened doors of creativity throughout the video-game business."

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Without much fanfare, Amazon has more than tripled its revenues since 2002, to $13 billion. The key: giving customers choices, not just among products, but also between buying from Amazon directly or from outside vendors on the site. Amazon's new digital offerings -- in e-books, videos, and music -- present a fresh menu of options. The company's digital music store, launched in May, already comprises 3 million songs, all compatible with any device and any music software. Similarly, Unbox allows Amazon customers to rent films and TV shows, and watch them on a variety of players. In an era of fighting formats and fears of piracy, that's uncommonly ecumenical.

When Alibaba went public last November and raised a stunning $1.5 billion -- the biggest Internet IPo since Google's -- it also raised eyebrows around the world. But probably not those of founder Jack Ma, who back in 1999 recognized that China's 42 million small- and medium-size companies (the vast majority of business in the country) might create some opportunities for e-commerce. Alibaba provides a point-and-click system for suppliers to get online and connect with distributors and consumers all over the world. The Chinese version today boasts 16 million users, and the english version has 9 million. Watch out, eBay.

Once a maker of wood products and tires, the Finnish firm has thrived in the wireless world. Today, Nokia has a 37 percent (and growing) share of the global cell-phone market, more than twice that of its closest competitor, Motorola. How? A two-tiered design process that identifies global consumers' "remarkable similarities in what they want and need in their mobile devices," says senior design manager Rhys Newman, then adds local insight. Bright colors are key to success in India, China, and the Middle East, "where a phone can show status," he says. Markets with low literacy rates get phones without written menus. The company's next challenge is to gain momentum in the U.S., where it has less than 10 percent of the market. It's betting big on the feature-rich N95 smartphone -- and an anti-Apple strategy of welcoming third-party apps.

You expect fancy footwear from Nike. But its latest masterstroke is social networking, online and off. From events to the Web to unique retail hubs, Nike is blurring the line between brand and experience.

From a CDC childhood obesity campaign to the Acumen Fund's clean water project for developing countries, the Palo Alto-based design firm didn't shy away from tough clients in 2007. "As social issues increasingly become business issues," says CEO Tim Brown, "This will be a critical new direction for design." In addition, the company's cabin and cockpit instrument panel designs for the Eclipse 500 Very Light Jet won IDEA Gold medals. But it was Ideo's "Keep the Change" campaign for Bank of America that had perhaps the most impact. Ideo found that boomer women with kids tend to round up their financial transactions, so they developed a service that rounds up purchases made with a debit card, then transfers the monetary difference from the customer's checking account to her savings. In its first year, 2.5 million customers signed up.

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GE makes our list not on reputation but the strength of its breakthrough products. Among them: An HD CT scanner that reduces radiation exposure by half; a reengineer of the bestselling CF34 jet engine for the booming Chinese aviation market; a hybrid locomotive that cuts emissions by 50 percent -- evidence that Ecomagination is more than just marketing babble. Coming up, commercially viable OLED lighting by 2010.

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In 2007, the social-networking leviathan had variously dazzled with its ability to reinvent the wheel (opening its platform to outside developers) and drove you to cyberpicket due to its boneheaded missteps (trying to sell advertising by telegraphing its users' every move). But after a year lived dangerously, Facebook is officially A-list, with a $15 billion valuation to boot, thanks to Microsoft's $240 million investment. That's nothing to throw a sheep at.

Careful readers of this magazine may be scratching their heads right now, in light of our recent cover story laying out the many challenges facing Apple. But the company has had, indisputably, one hell of a run. In the past year alone, three major new products -- iPhone, iPod Touch, and Leopard OS -- fueled triple-digit revenue growth. So while analysts forecast a more earthbound Apple in 2008, it deserves praise. And extra points for style.

Google's worldview sees information as a natural resource, one that should be mined and and sorted and universally distributed. Information is a necessity, like clean water. That idea stands at the center of all Google does, unifying what can appear to be wildly disparate projects: mapping the world, searching the Web on a cell-phone screen, providing an early response system for epidemics and natural disasters, developing cheap renewable energy. Android, for instance, isn't simply a universal platform for mobile phone applications. It's a new pipe -- and a far bigger pipe -- to serve a parched landscape.

The World's 50 Most Innovative Companies

This list begins with a startup that dared to go up against the internet giants. Baidu, the king of Chinese search (60% market share in 2007) has features which are customized for locals. Cofounder Robin Li is convinced that Baidu will "become bigger than Google," and he's in a hurry to get there: He recently launched a Japanese search engine, introduced search for ad-supported streaming music, and was first to offer mobile search in China.

Read more about Baidu

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1 Comments

  • Susanna Schick

    Innovative? There's nothing innovative about buying up all major media sources to better shove your BS POV down everyone's throat. Unless you consider brainwashing the American people on countless lies, starting with falsely proclaiming Bush the winner of the 2000 election.

    How you can put the man partly responsible for the past 8 years of horrendous government on this list defies reason. Fuck Murdoch.