Initially shunned by mobile phone developers Microsoft has finally admitted that it has resorted to paying developers to write applications for their new Windows Phone 7 applications.
The deal, which was confirmed by project director Todd Brix, means developers will get material support, such as software, test phones and marketing, as well as minimum revenue guarantees.
He said that if the application fails to perform in the early stages, Microsoft will make up the difference over time.
Under pressure from Apple and Google Android applications, Microsoft had no alternative but to pay for application development, say analysts.
Microsoft is not saying how much budget they have allocated to the development of applications but they did say that it would be larger than what was used in the past to court Windows Mobile developers.
The company has also admitted that they have approached both Android and Apple developers to work on Windows Phone 7 applications.
The new Microsoft mobile OS is due later this year however the problem that Microsoft faces is that all previous applications are set to be rendered virtually useless due to a change in the way that the OS has been coded.
Web site, Electronista, said that any gains in the number of Microsoft-friendly mobile apps will have been erased and will leave Microsoft with a relatively empty store compared to its rivals. Apple and Google have at least 225,000 and 50,000 apps respectively, and even companies that have fared poorly in courting outside developers, such as Palm and RIM, have still had a few thousand apps in their younger app stores.