The MediaGuardian is reporting that -

“…the BBC has set up a £350m war chest for expansion into social networking on the internet and international acquisitions.

The BBC is to increase its presence in the social networking world with a series of new and improved websites, based around its favourite brands such as the car programme Top Gear.

BBC Worldwide has a £350m borrowing facility it can use to fund the expansion, though it is unlikely to use the whole amount. Some is also likely to be used on BBC Worldwide acquisitions.”

The article suggests that with the likely ’shortfall’ in the licence fee revenues the BBC will look to its commercial arm to generate alternative sources of income. Leveraging BBC content to promote social networking products is likely to net the organisation significant revenues. It is also likely to expand social networking to a new demographic - the MySpace and Bebo offerings generally attract younger Internet users.