News Corp's Australian newspapers and pay TV companies will stay together while worldwide the media group's publishing assets are split off from TV and film under a restructure announced by the company overnight.
News Corp chairman Rupert Murdoch outlined the restructure plan in a briefing to analysts in New York, saying the plan to divide the entertainment and publishing businesses into two listed companies would "be better managed and more easily managed".
Shares in News Corp, which had gained 10 per cent in value since the company indicated on Tuesday it was considering the split, fell back in early trade on Friday, down 38 cents or 1.7 per cent to $21.99 by 12.15 AEST.
Under the plan the publishing company will own all of News Corp's newspapers, among them the Wall Street Journal, the New York Post, the Sun in the UK and The Australian.
News Ltd, News Corp's Australian arm, will continue to own a stake in pay TV businesses Foxtel and Fox Sports.
News Corp chief financial officer David Devoe told analysts it was simpler to maintain the Australian assets as a geographically united entity.
"They are managed together now and we think it's better to leave it alone," he said.
Initial reaction to the plan, which will take a year to enact, was positive.
Morningstar analyst Michael Corty said in a note to clients that the split was "a move that shareholders have been hoping for over the past several years, especially after the phone hacking scandal that erupted last year".
News Corp's publishing assets generate about 10 per cent of the company's pre-tax earnings, but Mr Murdoch said he was confident of the profitability of a stand-alone publishing business because news was "the most valuable commodity in the world".
One analyst, who asked not to be named, said the publishing company would be a cash-generating business rather than a growth stock for investors.
The analyst said current disruption in the media industry meant there would not be growth "for a good three or four years" as the industry restructured.
Mr Murdoch, in an interview on his Fox News channel, denied the split was being done to isolate the profitable entertainment business from negative fallout attached to the UK phone hacking scandal, which resulted in the closure of the News of the World paper.
He also said he had "moved on" from bidding for the 61 per cent of British pay TV broadcaster BSkyB that News does not own.