According to Bloomberg, Microsoft will pay Nokia more than $1 billion to promote and develop Windows Phone-based handsets.

The agreement for the more than billion-dollar payment was part of a campaign by Microsoft to keep Nokia from choosing Google's Android operating system, one of the people said. Nokia also opted for Microsoft because Windows Phone software, which is newer than Android and has a smaller number of handsets for sale, gives Nokia a better chance to stand out, one of the people said.

You read that right - $1 billion. That's how much Microsoft wanted to avoid Nokia going with Android. And given the numbers involved, it seems that Microsoft really was desperate to prevent Nokia from adding to the ever-growing popularity of Google's open source platform.

No wonder Nokia was ready not only abandon its own Symbian platform, but also shun Android and go exclusively with Windows Phone. While Nokia has been at pains to emphasize that Windows Phone will be its primary smartphone platform, but it's hard to see Symbian lasting long given the competition, so it's fair to say that Nokia has turned itself exclusively into a Microsoft OEM. And that's an unusual thing for a smartphone maker. While LG, Samsung and HTC and so on have Android and Windows Phone (and a smattering of other smaller operating systems such as Bada and Brew), Nokia is betting the farm entirely on Microsoft and Windows Phone.

But for a $1 billion, I think that in the short term at least, Nokia can afford to.

What do you think? Will this gamble pay off for Nokia? Is Microsoft really that scared of Android?