Opposition seats: Koh Tsu Koon Barisan Nasional (Gerakan) Lim Guan Eng Pakatan Rakyat (DAP) The 12th Penang election was held on 8 March 2008.

The legislative body had been dissolved on 13 February by the Governor of Penang, Abdul Rahman Abbas, on the advice of the incumbent Chief Minister, Koh Tsu Koon, who also led the state's ruling coalition at the time, Barisan Nasional (BN).

Among the factors were the deteriorating cleanliness in George Town, incoherent urban planning, poor traffic management, the state's economic slowdown and persistent brain drain.

In addition, the decades of brain drain took its toll, as Penang suffered a shortage of professionals, who generally preferred to move to the Greater Kuala Lumpur area for business and employment opportunities.

[8][9][14] Widespread discontent over Penang's decline led to campaigns by Penang-based non-governmental organisations (NGOs) and the national media to return the city-state to its former glory.

The internal infighting, exacerbated by Koh's indecisiveness, adversely affected BN's campaign in Penang, as the coalition was unable to publicly declare its Chief Minister-designate.

In early 2008, an online news portal alleged that the incumbent Chief Minister, Koh Tsu Koon, had spent RM10 billion to persuade Motorola to stay in Penang.

[19] The BN administration was also condemned by Penang-based non-governmental organisations (NGOs) for steamrolling the Penang Global City Centre project, which was the brainchild of Partick Lim, a tycoon who maintained close ties with the then Malaysian Prime Minister, Abdullah Ahmad Badawi.

Both local governments accrued large annual deficits in the preceding years, but more so for the Seberang Perai Municipal Council, which had its lavish headquarters near Bukit Mertajam completed in 2006.

By contrast, the Pakatan Rakyat (PR) coalition, which lacked the resources available to its opponent, launched its theme "just change it", heralding a more aggressive campaign to overthrow the BN-controlled state government.

Due to Barisan Nasional's control of the traditional mainstream media, including newspapers, television and radio, the Pakatan Rakyat (PR), led by the Democratic Action Party (DAP), turned to other methods of reaching out to voters.

[28] The Internet played a vital role in PR's campaign, by allowing critics of the BN administration to air their views on issues which had been deliberately ignored by the mainstream media.

[22] The DAP sought to tap into its booming online presence by nominating Jeff Ooi, a blogger, as its candidate for the Jelutong parliamentary constituency on Penang Island.

[19] Owing to the increasing use of mobile phones, the short messaging service (SMS) was also put to use to disseminate information regarding PR rallies during the campaigning period.

At 12.30 a.m. on 9 March, the top leaders of the PR, led by Lim Guan Eng, held a press conference at the Red Rock Hotel in George Town.

[19] He also began instituting the CAT policy (Competency, Accountability and Transparency) in the Penang state government; in an unprecedented move, Chief Minister Lim himself took to answering questions posed to him online and via press conferences.

[19][37] The CAT policy entails the adoption of the open tender system for state government contracts and projects, to avoid corruption and to promote transparency.

[37] In addition, one of the major initiatives of the new PR-led Penang state government was to abolish the controversial New Economic Policy, which had been implemented throughout Malaysia by the Barisan Nasional since 1971.