It’s a big news day for Vodafone (NYSE: VOD). First, it announced its CEO Arun Sarin will step down and then it reported stellar earnings. Now, there’s also a report by the Financial Times that quotes multiple sources as saying that Vodafone will make several acquisitions as a way to beef up its mobile Internet services.
The spending spree started this month when Vodafone agreed to pay $48.7 million for Zyb, a Danish social networking company. The article reported that the scale of acquisitions will remain relatively small, and that valuations will be similar to Zyb, according to two people familiar with the situation. Leading Vodafone’s new Internet services group is Pieter Knook, who recently left Microsoft’s (NSDQ: MSFT) Windows Mobile division. The article laid a pretty compelling argument for why Vodafone should be aggressively pursuing this strategy. It noted both Nokia (NYSE: NOK), which is midway through launching its own services initiative called Ovi, and Google (NSDQ: GOOG), which is also beefing up its mobile strategy with a several pronged approach. There’s additional incentive in the form of revenues. The company reported today that year-end data revenues are up 35.7 percent to $4.3 billion, rising from $2.7 billion a year ago.
If this is the case, the next logical question to ask is, what will Vodafone buy? Will it follow Nokia’s lead by purchasing a mapping company, like Navteq, or a media-sharing company such as Nokia’s purchase of Twango? Or will it go in a slightly different direction, and go head-to-head with Google, to play in the mobile search and advertising business? Either way, there’s plenty of companies to buy, so I’m sure Vodafone will be busy evaluating its options.