• Bloomberg Businessweek, Tuesday, March 8, 2011 11:29 AM

How badly does Microsoft want to jump-start its mobile business? In pure dollar terms, the software giant reportedly plans to pay Nokia over $1 billion to promote and develop its Windows-based handsets as part of their smartphone software agreement. "If it succeeds, the partnership may benefit both sides financially while helping stave off a smartphone threat from Apple Inc. and Google Inc.," reports Bloomberg-Businessweek, which broke the news.

"That's how much ... Microsoft is paying Nokia to champion its ailing Windows Phone 7 OS for smartphones, in an attempt to revive both business's hopes in the smartphone game that's quickly being eaten up by Apple and Google," writes Fast Company. Originally, "The deal, under which Nokia will use the Windows Phone 7 OS, was seen as a coup for Microsoft, and a potential blunder by Nokia," notes VentureBeat.

As a result, the phone maker's shares have dropped 26% since the accord was unveiled in February -- "reflecting doubts about the move to adopt Microsoft's operating system," according to Bloomberg-Business. The $1 billion partially explains Nokia's rationale, and suggests that the phone maker wouldn't have considered using Microsoft's operating system without such a handsome payoff.  "No wonder Nokia agreed to use Windows Phone software," jokes The Seattle Times.

"Of course, Microsoft can afford the billion dollars to grab mobile market share, something that it has been shedding for years," writes The Next Web. "With the Nokia deal, Microsoft has a chance to truly explode its new platform around the world." Likewise, "Considering the sums involved in control of even a small segment of the mobile world, a billion doesn't even seem like much," writes TechCrunch. Meanwhile, Microsoft is still expected to make money from royalty payments made by Nokia, Bloomberg-Businessweek reports.

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