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Microsoft Is Writing Checks to Fill Out Its App Store

Nowadays, cellphones are all about apps. And Microsoft is so determined to have lots of brand-name apps for its Windows Phone app store that it is willing to pay for them.

Microsoft Corporate Headquarters
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Microsoft Corporate Headquarters

All an app maker has to do is sign on the dotted line.

After years of struggling in the phone market, Microsoft teamed up with Nokia last year to challenge the dominance of Apple’s iPhone and Google , which makes the Android operating system. The latest fruit of their collaboration is a gleaming machine called the Lumia 900, which goes on sale in the United States on Sunday and is considered to be the first true test of how well the partnership will fare.

But the hundreds of thousands of apps that run on Apple and Android devices will not work on phones like the Lumia 900 that use Microsoft’s Windows Phone software. And many developers are reluctant to funnel time and money into an app for what is still a small and unproved market. So Microsoft has come up with incentives, like plying developers with free phones and the promise of prime spots in its app store and in Windows Phone advertising.

It is even going so far as to finance the development of Windows Phone versions of well-known apps — something that app makers estimate would otherwise cost them anywhere from $60,000 to $600,000, depending on the complexity of the app. The tactic underscores the strong positions of Google and Apple, neither of which have to pay developers to make apps.

When Microsoft offered to underwrite a Windows Phone version of Foursquare, the mobile social network, Holger Luedorf, Foursquare’s head of business development, did not hesitate to say yes.

“We have very limited resources, and we have to put them toward the platforms with the biggest bang for our buck,” he said. “But we are a social network and it is incredibly important for us to be available on every platform.”

Foursquare has in-house engineers working on iPhone, Android and BlackBerry versions of its service. But had Microsoft not offered to pay an outside company to do the work, Mr. Luedorf said Foursquare would “probably not” have developed an app for Windows Phone.

Ben Huh, chief executive of the Cheezburger Network, a collection of humor and entertainment sites, said Microsoft’s market share was too small to warrant in-house development of a Windows Phone app. But when Microsoft approached his company about making an application featuring funny photos of cats, he agreed. “They made it very easy for us,” he said. “They took care of everything.”

Casey McGee, senior marketing manager for Windows Phone at Microsoft, confirmed that the company offered an array of incentives for developers, but he declined to name the apps Microsoft had financed.

Still some holes ...

Mr. McGee conceded that there were still holes in Microsoft’s lineup. “We are by no means satisfied with our catalog,” he said. “That’s something we can get better at, and do better at, every day.”

Microsoft now has more than 70,000 apps in its app store, including big names like Netflix, YouTube, the Weather Channel, Amazon Kindle and the game Fruit Ninja. Apple, by comparison, has more than 600,000 apps, and Android has nearly 400,000. Analysts say that Microsoft does not need a million apps to appeal to phone buyers — just the ones that are so popular and mainstream that they feel like features of the phone itself.

“Once you get to 100,000, the number stops being important,” said Jan Dawson, an analyst at Ovum, a research firm in Britain. “I’m not saying they can take their foot off the gas pedal. They still need the apps that are dealbreakers for buyers.”

Despite Microsoft’s best efforts, a number of popular applications are noticeably missing from its store, including Pandora, the streaming music service; Instagram, the photo-sharing application; and games by Zynga. AT&T, the sole carrier of the Lumia 900 in the United States, has said that it will train its sales force to talk up the apps that are available and give demos of alternatives to curious shoppers.

The Windows Phone store has a version of the app phenomenon Angry Birds, but not the sequel from its maker Rovio, Angry Birds Space, which has also been a big hit. Rovio’s marketing chief, Peter Vesterbacka, said last month that it would not be worth the effort to bring the game to Windows Phone. But later that same day, Mikael Hed, its chief executive, said the company was “working toward” building a Windows Phone version. Rovio has not said when that might happen, and both companies declined to discuss what caused the about-face.

Often Microsoft’s problem is not outright refusal by a developer, but more that its platform is simply not a priority. Sonos, which makes apps for Apple and Android devices that allow customers to control its networked home audio equipment, does not yet know when it will release a comparable Windows Phone app.

“We’re definitely watching it carefully,” said John MacFarlane, chief executive of Sonos. “We believe it’s going to be a player.”

Microsoft has also approached news organizations, including The New York Times, about having a presence in its app store. Eileen Murphy, a spokeswoman for The New York Times Company, said that its Windows Phone app was built by outside developers, and that “Microsoft provides assistance to help ensure that the app is best in class.” Ms. Murphy declined to say whether Microsoft had paid for the app’s development.

Even Facebook did not build its own Windows Phone app, the creation of which was underwritten by Microsoft. Derick Mains, a spokesman for Facebook, said that for platforms other than Apple’s and Google’s, Facebook encourages companies to make their own apps, certifying them before they are released.

Microsoft’s weak position in mobile apps is in stark contrast to the clout it had with developers in the heyday of the PC era. Its success with Windows was partly built on an all-out effort it made in the 1980s and ’90s to get independent software companies to make Windows the primary operating system for which they wrote applications.

That influence began to weaken somewhat when the Web era took off and more companies began to design services and products that ran through browsers. But it has accelerated further as much of the creative talent in the developer world has shifted toward smartphone and iPad applications.

Sarah Rotman Epps, an analyst at Forrester Research, said Microsoft’s relative weakness was a function of not having a big enough audience of users. “Developers go where the money is, and the money is where people are,” she said.

Ms. Epps noted that Microsoft and Nokia currently appeared to be going after customers who are not already using iPhones and Android devices, and so may not be as familiar with the mobile apps they cannot get on Windows Phones. To someone moving from a BlackBerry or an old-fashioned feature phone, the selection of Windows Phone apps is likely to be satisfying, she said.

Ben Lamm, who runs Chaotic Moon, an app development studio that developed Windows Phone apps for TripIt and Pizza Hut, among others, said larger companies were warming up to Windows Phone.

“We’re starting to get requests from firms that want a Windows Phone app,” he said. “It’s still only 5 to 10 percent of our total requests, but very different than a year ago, when only Microsoft was calling us to do work.”

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