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News Corp split begins as Murdoch names unit chief

Sophie Estienne
Rupert Murdoch put the future of his newspaper and publishing empire in the hands of a fellow Australian as he set in motion the split of the media-entertainment conglomerate.

Media magnate Rupert Murdoch named close confidante Robert Thomson, an Australian, as the new boss of his newspaper and publishing empire Monday, paving the way for a major restructure at News Corp.

The appointment of Thomson, 52, currently editor-in-chief of The Wall Street Journal and Dow Jones Newswires, was Murdoch's opening gambit in a split of his media and entertainment conglomerate that is expected to conclude within weeks.

But the announcement was accompanied by the unexpected shutdown of the media group's iPad newspaper The Daily, due to a lack of readers.

Murdoch's plan is to break News Corp. into two companies, one with the fast-growing film and television operations, to be named Fox Group, and the other -- retaining the News Corp name -- managing news and publishing assets.

News Corp said Thomson will take the helm of the global publishing entity as chief executive officer on January 1.

Softly-spoken and a one-time China correspondent, Thomson has become ever closer to Murdoch, 81, since the former made him editor of The Times of London a decade ago.

"Congratulations to Robert Thomson, incoming CEO of our publishing company. A special leader and great friend. Also an Aussie!" wrote the Australian-born Murdoch on his Twitter feed.

In a statement from its New York headquarters, News Corp said Mike Darcy, a former chief operating officer of BSkyB, will replace Tom Mockridge as chief executive officer of its British newspaper holdings group, News International.

Mockridge -- a New Zealander who took the reins at News International at the height of a scandal over illegal voicemail interceptions last summer -- leaves the company at the end of the year.

News International was publisher of the News of the World, the paper at the center of the phone hacking furor that has cost News Corp. hundreds of millions of dollars in legal settlements and costs.

News Corp. shut down the paper last summer but its sister daily, The Sun, remains locked in a legal battle over alleged illicit payments to police officers and government officials.

The splitting of News Corp. into separate divisions, mooted in the summer, is partly seen as a sop to shareholders angered by the reputational damage and costs inflicted by phone hacking, but Murdoch made no reference to either.

"This is an incredibly exciting time for me personally, and for our companies' ambitious futures," he said. "The challenges we face in the publishing and media industries are great, but the opportunities are greater."

However, the company's iPad app The Daily will cease on December 15, but not without adding cryptically that "the brand will live on in other channels."

As previously announced, Murdoch will serve as chairman of the new News Corporation and chairman and CEO of Fox Group.

Chase Carey will be president and chief operating officer of Fox Group, with Murdoch's son James continuing in his capacity as deputy chief operating officer.

Gerard Baker, Thomson's deputy at The Wall Street Journal, is promoted to editor-in-chief, a role he will take up on January 1.

News Corp's publishing division has annual revenues of $8.8 billion and as well as the Journal it includes the New York Post, The Times, The Sunday Times, The Sun, newspapers in Australia and the HarperCollins publishing House.

The Fox Group will include the 20th Century Fox studios, Fox broadcasting operations and cable television, with annual revenues of $23.5 billion.

Monday's announcement followed last week's release in London of a report by judge Brian Leveson which, in the wake of the phone-hacking scandal, proposed a new independent self-regulatory body for British newspapers backed by law.

British Prime Minister David Cameron commissioned the Leveson inquiry in July 2011 amid revelations that the News of the World hacked the voicemails of a murdered schoolgirl as well as celebrities and public figures.

Media analyst Ken Doctor said that "the slew of announcements show energy, and a path forward" for News Corp, in contrast with its rival The New York Times, which announced plans to cut its newsroom staff.