Small world as BBC buys Lonely Planet

London Briefing/Fiona Walsh: As veteran BBC inquisitors John Humphrys and Jeremy Paxman scrap "like rats in a sack" over looming…

London Briefing/Fiona Walsh:As veteran BBC inquisitors John Humphrys and Jeremy Paxman scrap "like rats in a sack" over looming budget cuts at their Today and Newsnight programmes, there is one part of the British Broadcasting Corporation that has no such financial worries.

On Monday, the corporation's commercial arm unveiled a £100 million coup as it announced a deal to take control of the Lonely Planet guidebooks business, better known as the "backpackers' bible".

It is the biggest expansion move to date by BBC Worldwide, which plans a multimillion pound investment in its new purchase over the next couple of years as it makes the best-selling Lonely Planet travel guides available online. As well as beefing up the web presence of one of the best-known names in the travel business, it will build on Lonely Planet's television programming and move it into magazines.

Hailing the deal as "a great feather in the cap" for BBC Worldwide, the commercial arm's chairman, Etienne de Villiers, said it was further evidence of its ability to become "a major international media player". Often overlooked amid the BBC's broadcasting activities, the corporation's commercial arm is a sizeable business - it manages the BBC's global television sales and is also Britain's third-largest publisher of consumer magazines, selling almost 100 million a year, including titles such as Top Gear and Good Food.

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Profits last year rose by 24 per cent to a record £111 million - treble what they were in 2003/04 - on sales 8 per cent ahead at £810 million, boosted by strong overseas sales of programmes such as Dr Who and Planet Earth. There are ambitious plans to double profits over the next five years, a target the Lonely Planet deal should help it achieve.

The acquisition also goes a long way towards achieving BBC Worldwide's target of earning two-thirds of its profits overseas by 2010, against 46 per cent currently.

Set up in the 1970s by British couple Tony and Maureen Wheeler, Melbourne-based Lonely Planet has grown to become the world's leading publisher of travel guides. Its first title, Across Asia on the Cheap, was followed by South East Asia on a Shoestring, both of which remain cult classics among its traditional backpacker readers. In total, it now publishes about 500 guides and has widened its appeal to more affluent travellers.

But its web development has been more limited, and that is something the BBC, with its vast experience online, is keen to correct.

BBC Worldwide is delighted with its coup in persuading the Wheelers, who will retain a 25 per cent stake, to part with control of the company. They are thought to have received numerous approaches over the years, including interest from National Geographic and Australia's Fairfax Media.

But not everybody is thrilled with the move. Conservative MP John Whittingdale questioned whether it was right that the BBC should "effectively nationalise" a publishing company.

The expansion of BBC Worldwide comes amid continued speculation over where the axe will fall at the BBC, which is struggling to plug a huge hole in its budget after a below-inflation licence fee settlement. BBC director general Mark Thompson has apparently ruled out axing an entire channel but instead appears to favour cuts across the board.

Nerves at the BBC have become increasingly frayed in recent weeks. Even such fearless performers as Humphrys and Paxman have become embroiled in a public spat as they fight their own corners - Humphrys for his Radio 4 Today programme and Paxman for BBC 2's Newsnight.

In what has been billed "the battle of the budgets" - played out in the pages of the BBC staff magazine, Ariel - Humphrys has insisted that Today ranks above Newsnight, a claim robustly dismissed by Paxman. "The greatest living Welshman" might like, he said, "to consider how clever it is for us all to start fighting like rats in a sack."

Quite what the combative pair of veteran broadcasters will make of the corporation shelling out £100 million for a business best-known for its backpackers' guides is anybody's guess.

But the good news for the cash-strapped corporation is that all the profits of its commercial arm are ploughed back into programme-making. If it achieves its ambitious growth targets, then perhaps the axe may fall a little less heavily in the future.

• Fiona Walsh writes for theGuardian newspaper in London