According to a source "familiar with Microsoft's developer outreach" speaking with GigaOM says that as the company got ready to attack the whole Windows Phone 7 situation, the split off into two teams: a depth team made to reach approximately 50 of the top app makers in the world, and a breadth team made to access the rest of the developer community and offer them support. What did that depth team do? Dish out the cash! Sources speaking with Ryan Kim note that in many cases, Microsoft offered either revenue guarantees or developers to work with companies to develop their particular WP7 app. Amongst those built or payed by Microsoft are: IMDb, Twitter, Facebook, Yelp, and Amazion, plus more.
“It’s not that we’re funding a team of developers to build apps,” said Kim's source, “It was that without the apps the phone is incomplete; consumers will be handicapped if they don’t have a good Foursquare or Twitter app.” Foursquare had originally planned on only creating an app when WP7 reached 10 million devices sold - after getting payed to develop though, Foursquare was available for the initial launch.
Some groups didn't take a cash bonus, for some weirdo reason - for example PopCap - offered $100,000 for a game (it's unclear which game, precisely), but turned it down and created a game anyway (again, unclear if this is the game they would have been payed for): Bejeweled Live.
The director of PopCap's mobile business development did note that the group didn't want to be tied to a game creation agreement while their developers were only just getting used to the tools needed to create, but did find value in being on par with the WP7 launch. Stein noted: “Whenever you talk subsidy or royalty guarantees, there are strings attached ... We weren’t sure we could meet the commitment but we already identified we wanted to be on there. If the platform succeeds, the dollars we were kicking around the table will be peanuts.”
In the end, (in the beginning, that is,) Microsoft ended up promising initial Windows Phone 7 customers "over one thousand apps" - a number that's since grown past 2,000 - still no massive number compared to Apple's 300,000 or Android's 121,000, but hey, seems like they did their jobs, yes? Cash rules every app around me.