Mary Meeker, known as the “Queen of the Net” during the heady 1990s, is back. Her latest prediction is that the mobile Internet will be a huge wealth generator. She even thinks it will surpass the Internet and that mobile commerce will overtake traditional e-commerce.
   
The fact is that smartphones are extremely useful and convenient. They access the Net and e-mail, provide us relevant information based on our location, alert us to meetings and allow for the posting photos on websites like Facebook. But the “holy grail” is turning the smartphone into a virtual wallet.
   
It looks like this will happen fairly quickly. Take Google (Nasdaq: GOOG). It appears the company will launch a mobile payment platform this year. Based on a technology called near-field communication (NFC), Google’s virtual wallet will seamlessly process transactions. There will also be other features such as consumer reviews and mobile coupons and rewards. A report from IE Market Research forecasts that the NFC business will represent about a third of the estimated $1.13 trillion mobile transaction market by 2014.
   
eBay Inc. (Nasdaq: EBAY) is also building its own virtual wallet, which is based on its ubiquitous PayPal service. The company has been aggressively building its mobile platform with acquisitions and internal projects. Last year, eBay’s mobile applications accounted for about $2 billion in sales volume.
   
While all this is definitely exciting, it’s still not easy for investors to capitalize on the trends with these large companies. Google and eBay will continue to get much of their revenue from non-mobile sources.
   
So is there another way for investors to participate? Actually, one approach is to look at the IPO market, which is often the source of emerging tech companies. And a standout is Motricity (Nasdaq: MOTR). However, the offering came out in mid June 2010, when IPOs were having troubles. To get the deal done, Motricity had to cut the price on its offering to $10 (the prior range was $14 to $16). The stock then fell as low as $6.55.
   
Yet since then, the stock has seen a tremendous rally. It helps that techs have been in a bull phase, as have IPOs. At the same time, Motricity was extremely undervalued.
   
#-ad_banner-#Motricity also has a defensible business model. Through the years, the company has spent millions to develop a sophisticated mobile data platform. It allows for the delivery of content and applications, targeted marketing, billing support and messaging. These are must-have services and should benefit as mobile payments grow.
   
Motricity’s customer list is first-rate, with four of the top 10 global wireless: Verizon Wireless (NYSE: VZ), AT&T (NYSE: T), Sprint (NYSE: S) and T-Mobile USA. The company manages more than 200 million mobile subscribers. In the latest quarter, Motricity posted a 35% increase in revenue, to $37.9 million. About a quarter of the revenue come from professional services, such as to implement and maintain installations. The remaining three-quarters come from recurring amounts for transactions and user fees.
   
To find more growth, Motricity has been investing in international markets. One of the latest deals is with Indian telecom Reliance Communications, which has 105 million subscribers.
   
Action to Take–>  Because of prior net losses, Motricity’s price-to-earnings ratio (P/E)is not applicable (although, the company was able to produce net income of $3.3 million in the latest quarter). But looking at the P/E ratio on forward earnings — based on the consensus forecasts for the next 12 months — it comes to a reasonable 25. Another helpful metric is the price-to-sales ratio, which comes to six — which is in-line for a company, like Motricity, that is growing rapidly.
   
The stock has been quite volatile, so there is a good chance for investors to buy the stock on a dip.