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BBC underestimates web profit

November 29, 2007

From Colin Mann in London

The head of BBC Worldwide said the business has underestimated how much money it could make from the Internet. Chief Executive John Smith said the business initially aimed to get at least 10 per cent of its total revenues from the Internet, but has now realised this target is too low.

“We think we will be able to beat it. It has gone from one percent to nearly four percent in just 18 months. So already we are starting to see that probably we have under-egged the extent to which we will see more of our revenues coming from the Internet,” Smith told a conference in London.

BBC Worldwide’s pretax profit in the year to the end of March rose 24 per cent to £111.1 million (E161m) on sales of £810.4 million.

Smith, who became CEO of the BBC’s commercial arm in 2005, said there were four strands to the division’s strategy. These included capitalising on the 40 million international users to the website, that unlike its UK site, carries advertisements.

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