Business

News of the World: Will closure save News International?

Signs outside News International
Image caption The News of the World has been running for 168 years

News International has decided that this Sunday's News of the World will be the last edition of the paper to be published.

It has clearly decided that the brand is too badly tainted to allow it to continue within News International.

But will cutting the News of the World out of the group be enough to allow News International to prosper in the future?

BBC business editor Robert Peston said before the news broke that some of the companies that had been pulling their advertising from the News of the World were shifting it to its sister daily paper, the Sun.

That would suggest that the Sun has not been sullied by the scandal.

Justice Secretary Kenneth Clarke has told the BBC that "all they're going to do is relaunch it".

There have been rumours that a Sunday edition of the Sun will be launched, although News International has declined to comment on them.

The web addresses "TheSunOnSunday.co.uk" and "thesunonsunday.com" were registered two days ago, although it is not known by whom.

James Murdoch's statement referred to "colleagues who will leave the company", which suggests it will not simply relaunch under a different name.

News International has said that 200 people are employed by the News of the World, but has not said how many of them will be made redundant.

Peter Preston, former editor of the Guardian, said it would not be as simple as just relaunching.

"If you just do a seventh day version of what you're doing the rest of the week, it doesn't do as well - it's not what the public want," he told the BBC, stressing that the readership profile of the Sun and the News of the World are not the same.

The News of the World was the best-selling English-language newspaper, although its circulation had been falling since the late 1980s.

'Huge market'

Bob Satchwell, executive director of the Society of Editors, said its closure would leave a big hole in the market.

"It is a huge market - even though some people said they would boycott the paper this week and all those advertisers said they would pull out."

"There are something like 10 million readers who will be without what was their favourite paper and there will be a lot of big companies who had relied on the paper to advertise their goods."

The publicist Max Clifford, one of the alleged victims of phone hacking, said it would make commercial sense for News International to relaunch quickly "to get their public and their advertisers back".

"It had become obvious that the cancer that was emerging because of the things that were coming out was far too serious, far too deep, to save the paper."

Steve Hewlett, presenter of BBC Radio 4's The Media Show, said people he had spoken to at News International were furious that the News of the World would be closing but that Rebekah Brooks would continue to be the company's chief executive.

Rebekah Brooks was editor of the News of the World at the time when it is alleged that Milly Dowler's phone was hacked.

"Will this draw a line under the scandal? I'm not sure while she is in charge," Mr Hewlett said.

Chris Goodall, analyst at media consultancy Enders Analysis, told the BBC that the closure of the News of the World was about making sure News Corporation is allowed to take over the rest of BSkyB.

He said the impact of the newspaper's closure on the business would be "pennies compared with the billions of pounds of cashflow that will come from owning all of BSkyB".

News Corporation is in the process of trying to buy the 61% of the satellite broadcaster that it does not already own.

But there have been calls for the media regulator Ofcom to investigate whether News Corporation is a "fit and proper" owner for BSkyB, in light of the phone-hacking scandal.

BSkyB shares closed down 1.8% in London, while News Corp shares in New York were barely changed.

Mr Goodall added that it was "as certain as night follows day that the Sun on Sunday will be with us within the next few months" and that "people will forget about the News of the World pretty quickly".

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