How to invest in ISIS

The goal of ISIS is to provide wireless services to more than 200 million consumers. If the roll-out, which is taking place over the next year, gains traction, it could stand to pad the pockets of several companies.

Online mobile shopping could command as much as 12 percent of total global e-commerce by 2015, according to a report ABI Research. It’s a sign of just how comfortable consumers are getting using their phones to make purchases. The next logical step is to use mobile phones as payment mechanisms in stores, restaurants and small businesses – doing away with plastic once and for all.

The transition from credit cards to phone swiping could completely change the way with interact with businesses. No longer would we use a simple plastic card with a magnetic strip on the back, we’d be paying with a computer that could track purchases, offer discounts, tick off rewards points and offer incentives to come back.

ISIS is leading the charge into the pay-by-phone marketplace through a partnership with AT&T, Inc. (NYSE:ATT), Verizon Communications Inc. (NYSE:VZ) and T-Mobile USA. The national mobile commerce network will use near-field communication (NFC) technology to allow phones to wirelessly communicate with checkout terminals.

The goal of ISIS is to provide wireless services to more than 200 million consumers. If the roll-out, which is taking place over the next year, gains traction, it could stand to pad the pockets of several companies. Here are some tickers to consider if you’d like to invest in ISIS and NFC:

Discover Financial Services (NYSE:DFS). Payments made through the ISIS network will be processed by Discover. The Discover network is currently accepted at more than seven million merchant locations nationwide. DFS will, no doubt, get a percentage of all the sales the company processes.

Barclays, PLC (NYSE:BCS) Barclaycard US is expected to be the first issuer on the ISIS network thanks to the company’s experience processing NFC payments using standard credit cards. Eventually the ISIS network will be expanded to other banks.

While it’s unclear exactly how AT&T, Verizon and T-Mobile will profit off ISIS, I suspect they’ll also receive a cut of the payments processed over the network. They’ll likely ramp up efforts to partner with retailers to offer expanded services, too – things like rewards points, customer tracking and coupons.

It’s important to remember, though, that ISIS is just one of the many networks and companies working to dominate the pay-by-phone market. Visa, Inc. (NYSE:V), MasterCard, Inc. (NYSE:MA), eBay Inc.’s PayPal (NASDAQ:EBAY), Google Inc. (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) are just a few of the heavyweights with skin in the game. It’ll be interesting to see which companies come out on top.

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A savior for Microsoft (MSFT)?

If Windows Phone 7 pays off, it could do wonders for investors’ perceptions of Microsoft, especially if the company can create a thriving app marketplace similar to the iPhone’s AppStore (NASDAQ:AAPL). That could add a whole new revenue stream to the giant’s bank account, and that would make investor’s swoon.

It seems Microsoft (NASDAQ:MSFT) is the company everyone loves to hate. And the sad fact is, it’s because just about every human in the United States has benefited from their products at one point or another. Now, one gets the sense that the giant’s against the ropes.

Barclays (NYSE:BCS) cut their earnings estimates for Microsoft on slowing PC shipments, a leading gaming exec jumped ship for Amazon (NASDAQ:AMZN), and the company’s COO, B. Kevin Turner, just sold 141,407 shares. The Kin was a failure, the Wii’s cutting into their gaming market and their search deal with Yahoo! (NASDAQ:YHOO) hasn’t done much yet.

Can Bill Gates and Steve Ballmer re-invigorate the giant? Or is it time to turn the company into a dividend-paying value stock like General Electric Company (NYSE:GE)?

Perhaps not yet. Microsoft has just released the first ad for their Windows Phone 7, a device that they’re pinning much of their hope for the future on.

“This is make-or-break for them. They need to do whatever it takes to stay in the game,” Jonathan Goldberg, an analyst with Deutsche Bank, told TechCrunch. They don’t need Windows Phone 7 to crush the iPhone, but they need it to stop people from switching to the iPhone, and they’re spending the cash to make that happen. Marketing efforts for the new mobile OS are estimated to be near half a billion dollars (and that excludes the phone’s substantial development costs).

If it pays off, it could do wonders for investors’ perceptions of Microsoft – especially if they can create a thriving app marketplace similar to the iPhone’s AppStore (NASDAQ:AAPL). That could add a whole new revenue stream to the giant’s bank account, and that would make investor’s swoon. Thankfully, too, the phone’s on tap for an October release; well ahead of the holiday season.

Here’s their first ad for Microsoft’s Windows Phone 7. Does it make you want to buy it?