July 8th, 2011
04:11 PM GMT
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London (CNN)-When Rupert Murdoch bought the News of the World in 1969, it was the start of his stellar trajectory from Australian newspaper proprietor to global media magnate, with power way beyond many a rival's lofty ambitions.

Just like Murdoch, News of the World, or NotW, has always seemed to punch above its weight. The clue after all lies in its title, for aside from being a world newspaper, this publication is a staunchly British tabloid.

This week NotW finally lived up to its name for all the wrong reasons, becoming the day's 'news of the world' thanks to shocking allegations about the depths it had reportedly stooped to gain exclusive stories.

The British Prime Minister David Cameron called NotW's alleged hacking of the phones of murder victims to fallen soldiers "absolutely disgusting,"' while the opposition leader Ed Miliband has called for Rebekah Brooks, former NotW editor and current head of its parent company News International, to "consider her position."

Advertisers pulled their business from NotW and the scandal is threatening to derail a controversial takeover of BSkyB by Murdoch's News Corp. The cancer had to be cut off before it spread. As a result Rupert Murdoch's son James, Chairman of News International, made the dramatic announcement that after this weekend the NotW will be no more–a move which will cost 200 journalists their jobs.

But why pull Britain's best-selling newspaper with a readership of 2.6 million and 27 percent of the market among the country's Sunday newspapers?

These are the main reasons.

Advertisers: With an 18.3 percent share of the advertising market, according to analysts at Numis, NotW was up until very recently a formidable cash cow within the News International stable. Following the decision of many, high profile companies (from Ford to T-mobile) to pull their business, NotW's business model has effectively dried up. Add to that the readers' outrage and you can see that both revenues and circulation were likely to fall off a cliff this weekend.

And so James Murdoch's decision to donate advertising to good causes for the paper's final edition this weekend is a smart one, turning what would otherwise be dire numbers into an opportunity to attempt to rebuild News International's image. The question is: Will it be enough?

Criminal probe: The allegations surrounding News of the World are about as serious as they could be from both a legal and moral perspective, and have provoked a wave of public indignation.

The fire is spreading rapidly with Andy Coulson, former NotW editor and previously the Prime Minister's own head of communications, arrested Friday.

And as Murdochs (senior and junior) try to quell mounting anger, what's really interesting about this week's developments is that finally the tide seems to be turning against a company and family which -despite not being British- held huge influence over the UK's political landscape.

David Cameron finally acknowledged as much today "saying loud and clear that the relationship has to change in the future."

Just as Rupert Murdoch's Wapping revolution marked the death knell for Fleet Street, the phone hacking scandal shakes the foundations of his News Corp empire at a time when he will soon be preparing to hand over control to his heir apparent son James.

No more cozy chats with the UK's future leaders at Pebble Beach then. Business may soon become tougher for James Murdoch now, especially if the phone-hacking scandal prevents New Corp from buying the remaining portion of its uber profitable satellite television business that it doesn't already own.

Rebekah Brooks: The controversy has placed huge pressure on News International boss Rebekah Brooks to resign. This is because she was editor of the NotW at the time the allegations date back to.

So far the Murdochs have stood by the embattled chief executive. This is not all together surprising as she was hand-picked by Rupert Murdoch to her former role (at just 27 years old) precisely because of her aggressive news gathering and ability to the kind of exclusive stories that made the paper so popular.

The question is: To what extent was NotW allegedly relying on illegal practises like phone hacking to generate its exclusives during that time and was she aware of it? Brooks and Coulson have both publicly denied they were.

The storm engulfing NotW for the moment is likely to benefit some of its rivals, like Trinity Mirror Group and the Guardian Media Group who have long bemoaned the Murdochs' dominance in Britain. This is because advertisers are likely to flock to their titles instead. Yet the emergence of phone-hacking as a tool for generating stories is detrimental to the reputation of the entire press in Britain.

When I learned this trade, more than a decade ago, I was always taught the value of thorough reporting. As an industry we should be asking ourselves how a seemingly world-class news outlet like 'News of the World' could ever have confused a private investigator to intercept private phone calls with a legitimate profession called 'journalism.'



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