Auntie to buy from Uncle Sam

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The Independent Online

The BBC is scouring the United States for opportunities to buy up technology companies, as part of a plan to boost its commercial operations.

The move is through BBC Technology, which was spun out of the corporation this year to sell digital technology services to broadcasters. The BBC director-general, Greg Dyke, decreed the corporation's commercial operations should increase profits, to be ploughed into programme making. The BBC hopes its technology division will make profits in 2004.

BBC Technology believes the US market offers rich pickings, because President George Bush has ruled that TV companies must convert to digital in the coming years. The deadline for publicly-funded broadcasters is 2004 and commercial companies have until 2006 to make the switch. In addition, the roll-out of high-speed internet access will present new broadcast opportunities on the Web.

The BBC division will go head-to-head with management consultants such as Accenture, which is also planning to make money out of the switch. "There is a huge opportunity for us," said Philip Lansgdale, chief executive of BBC Technology. "It is a much bigger market [than in the UK]. We are going through a review of potential companies."

BBC Technology employs 1,400 people, mainly based in the UK. The company has hired the former Sun Microsystems executive Stephen McKenna as its US-based sales and marketing director to boost its presence across the Atlantic. Mr McKenna said: "It is certainly a buyers' market. As well as acquisitions we may also form partnerships with technology companies in the US." Next year BBC Technology plans to build up a 120-strong sales force, he added.

The company's clients include Fox Television Network and DirecTV. The next broadcasters expected to switch to digital are Los Angeles-based KCET and Boston-based WTNH.

And BT Technology is seeking bidders for a £200m contract to supply UK telecoms services for five years. BT, Cable & Wireless and Energis are the BBC's present suppliers. The BBC's tender document for the contract stresses that the corporation is seeking a "substantial cost reduction".

This is in part to meet stringent savings BBC Technology must make to its contract to supply services to its parent, thought to be worth £160m a year. BBC Technology must reduce this by 20 per cent over three years.

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