Dividing Company, News Corporation Extols the Future of Digital News, Tablets
Rupert Murdoch’s News Corporation, which owns Fox, the Wall Street Journal, Dow Jones, The Daily, and HarperCollins, will be split in two, separating the news publications from the rest of the company.
Following the announcement this week made by the mega corporation, Murdoch spoke publicly about the decision, stressing that “he would not allow the publishing company — which will include The Wall Street Journal, The New York Post, The Times of London and the HarperCollins book division, among other assets — to struggle financially without the safety net of News Corporation’s fast-growing and lucrative cable channels,” according to the New York Times‘ Amy Chozick.
Even though the newspaper industry has been struggling for years, Murdoch is hopeful about the new division, which will take a year to complete. He told the Times that the papers would focus on digital efforts and that news is “the most valuable commodity in the world.”
In a memo put out by News Corporation, Murdoch mentioned tablets, and how both the entertainment and news divisions could benefit from using them.
“In five years’ time, there will be at least 75 million tablets in the U.S. and 375 million in the world,” he wrote. “It is my firm belief that these two companies will be best positioned to compete in this rapidly evolving global economy and distribute our premium content on these platforms.”
In the interview with the Times, Murdoch said that the papers should not rely on highly profitable parts of the company, such as Fox News and 20th Century Fox, for financial help.
The Chief Operating Office of Chase Carey said the separation would give the papers “the impetus to grow and fulfill their potential.” The split comes after the infamous phone hacking scandal that the company endured, as well as the fact that newspapers are losing money.
The publishing side has already begun amping up Wall Street Journal Live, an online video stream of live news.
Even though Murdoch says he is optimistic about the publishing side, others are not.
In an interview with Bloomberg, Ken Doctor, an analyst at Outsell Inc., said, “In order to stabilize it over the next two to three years, they’ll have to make cuts, whether in staffing or possibly divesting some newspapers such as Times of London.”