BBC Worldwide, the broadcaster's commercial arm, has made its first major acquisition after buying a majority stake in the Australian travel guide publisher Lonely Planet, with the aim of bolstering the smaller company's online presence.
BBC Worldwide recently raised £350m in debt to acquire content companies around the world to boost its growth prospects and add to its already extensive content portfolio. Its acquisition of a 75 per cent stake in Lonely Planet looks to be the first in a series of acquisitions and represents BBC Worldwide's largest acquisition to date, although it has not revealed what it paid for the company.
Tony Wheeler, co-founder of the publisher, recently described the business as a "A$100m empire".
John Smith, head of BBC Worldwide, said the company still has "an enormous amount of resources to spend" as it looks to further expand its reach into target markets, specifically theUS, Australia and India.
Lonely Planet, which is based in Melbourne's western suburbs, was founded in 1972 by two British travellers – Tony and Maureen Wheeler – who arrived in Australia after extensive travelling through Asia with only a few cents. After publishing a guide to South-east Asia, Lonely Planet has grown into the world's largest travel guide publisher, which publishes 500 titles a year and employs some 360 authors.
The founders will retain a 25 per cent stake in the publisher, and said the tie-up with the BBC would provide it with added muscle to invest in its content and online businesses.
Mr Smith said the BBC deal offered Lonely Planet an alternative to a straightforward sale to a rival publishing house that might look to cut costs and strip the Australian company's assets. "It is very, very important that we don't do anything to disturb this business which is number one in the market," he said.
He added that travel guides are a fast-growing sector of the publishing market. "The days of only backpackers buying these books are long gone. Now everybody wants to research and book trips themselves," he said.
Mr Smith said the BBC will invest in improving Lonely Planet's online business. The company's website already attracts 4.3 million users, mostly to its user-generated travel advice forum The Thorn Tree. However, Mr Smith said the company has yet to utilise its brand or comprehensive research to take on the likes of expedia.com to offer auth-ored, impartial advice to travellers.
BBC Worldwide also said the acquisition will bolster its magazine business, already the third-largest in the UK, and will offer opportunities to exploit Lonely Planet's customer base to cross-sell TV content.
BBC Worldwide has around 500 hours of travel-related content including Michael Palin's popular TV travel shows, Planet Earth and the Coast series.
The Australian company currently develops a show called Lonely Planet Six Degrees, which is broadcast in 100 countries, and also offers a You Tube-like facility on its website on which travellers can upload their videos for other people to watch. Mr Smith described the company's TV content as "icing on the cake".