What next for News Corp?
The damage to Rupert Murdoch's multi-billion-dollar global media empire, News Corp, has already become much more extensive than most would have imagined only two weeks ago.
The News of the World (NoW) - the UK's most read newspaper - has been shut down, pre-empting a boycott by advertisers and readers.
Under pressure from the entire British political establishment, Mr Murdoch has also dropped plans to buy out the rest of British Sky Broadcasting.
Loyal ally Les Hinton, chief executive of Dow Jones, which publishes the Wall Street Journal, quit on Friday and Rebekah Brooks, who quit as chief executive of his UK newspaper business News International on the same day, was arrested on Sunday.
Now Mr Murdoch's business faces investigations in the UK and potentially the US and Australia, risking further revelations that could harm his reputation.
So where does News Corp go from here?
The Sun on Sunday
Shortly before the closure of NoW was announced, Mr Murdoch's UK newspaper business, News International, bought the internet domain name sunonsunday.co.uk.
Assuming the hacking scandal does eventually blow over, publishing the Sun seven days of the week would be a logical move.
Mr Murdoch's tabloid is already the UK's most read daily paper by a significant margin, and NoW was the leading Sunday paper before its demise.
The Sun has an editorial team ready to step in, and News International is now actively seeking to hire back NoW staff.
And the business is profitable.
News Group Newspapers - which owns the Sun and formerly the NoW - made £86m in the year to June 2010, admittedly a tiny fraction of the $2.5bn (£1.6bn) net income News Corp made during the same period.
But News International will not hurry the move, according to media consultant Theresa Wise.
"It would appear as very, very cynical... just News of the World with another name," she says, suggesting the run-up to Christmas might be a better time.
Sale of News International
Moreover, many argue that the importance of Mr Murdoch's UK newspaper business - which also comprises the Times and Sunday Times - is not as a profit centre.
Rather, it is as a source of influence over public opinion and politics.
And from this standpoint, its value to News Corp may already have been destroyed by the phone hacking scandal.
The crisis is already threatening to spread to News International's other titles, with former prime minister Gordon Brown accusing the Sunday Times of hiring criminals to target him personally - allegations rejected by the company.
There is talk that the entire business could now be put up for sale.
But, as the BBC's business editor Robert Peston points out, the scandal has hurt the entire UK newspaper industry, making News International less attractive to potential buyers.
"The question is, who is going to pay him the price that they are worth? He will not want to sell those papers at a loss."
Ownership of BSkyB
The future of BSkyB has been thrown wide open since Mr Murdoch dropped his planned bid to take full ownership of the UK satellite broadcaster.
The firm has become a mature, cash-generating business, with profits of £917m in the 12 months to March this year.
If all goes well for the media tycoon, he might just be able to revive the bid in a year or two, though BSkyB's share price suggests markets see no immediate prospect.
"News Corp has an enormous understanding of the business," says Ms Wise. "The Murdoch family are very long-term players. They have a reputation for coming back... They are consummate deal-makers."
But things may well get worse for News Corp.
If police bring criminal charges against News Corp management in the coming months, regulator Ofcom could deem the conglomerate no longer to be a "fit and proper person" to hold a UK broadcasting licence.
In that case, Mr Murdoch's firm may be forced to give up all control over a company he co-founded and in which he retains a 39% stake.
News Corp now faces formal scrutiny in the UK at three levels.
A parliamentary select committee has summonsed Rebekah Brooks, as well as Rupert Murdoch himself and his son James, to give testimony under threat of perjury.
All three have now agreed to appear.
The worst News Corp can expect from the hearings is public humiliation.
A renewed police investigation into phone hacking and alleged payments to police officers, may result in criminal charges in the autumn against more employees of NoW.
More worryingly, the investigation could spread beyond NoW to other papers owned by the group.
But the biggest challenge to News Corp may come from the public inquiry headed by Lord Justice Leveson.
It could result in a major tightening up of the rules that govern the behaviour, ownership and regulation of the media in the UK.
In particular, the government may legislate to limit a company's share across all media, according to analyst Claire Enders - something that could hurt News Corp in particular.
Investigations in other countries
An even bigger threat to News Corp could be looming across the Atlantic, where the hacking scandal has become big news.
Senior US Congressmen from both parties have called for two sets of criminal inquiries:
- for the FBI to investigate whether US citizens were victims of phone hacking by NoW, in breach of wiretap laws
- for the Justice Department to decide whether alleged payments to British police could mean that News Corp itself - as a US company - broke anti-corruption laws.
The big question is whether the investigations translate into a threat to News Corp's US broadcasting licence, as it has done in the UK, according to analyst Alan Gould of US investment firm Evermore Partners.
About a third of News Corp's revenues come from US television.
"The US television business is of big and growing profitability for the company," he says, unlike its loss-making US newspapers.
Meanwhile, the Australian prime minister Julia Gillard is mulling whether to open her own inquiry into media regulation and ownership.
The boss of News Corp subsidiary News Limited, which runs more than 20 papers and websites in the country has already opened an internal investigation to uncover any misconduct.
The hacking scandal has already claimed several scalps, including that of Andy Coulson twice - first as NoW editor in 2007, then as communications director to the prime minister, David Cameron, this year.
Also gone is Rebekah Brooks, who was NoW editor when the company allegedly hacked the voicemail of teenage murder victim Milly Dowler.
Much of Mr Murdoch's manoeuvring during the hacking scandal has been interpreted as an attempt to protect her.
Indeed, after he chose to close down the 168-year-old tabloid, staff accused him of sacrificing the red-top in order to save Mrs Brooks.
Even the position of Mr Murdoch's son and heir apparent, James, may be at risk, with calls led by shareholder advisory group PIRC, for him to be replaced as chairman of BSkyB.
"We live in a culture in which people at the top, whether guilty or not, carry the can," says Claire Enders.
Senior management could now find themselves in a double-bind, seen as either culpable for covering the scandal up, or incompetent for not tackling it much earlier.
Change at the top
Mr Murdoch is now 80 years old.
If his son James is seen as gaining control of the situation, Mr Murdoch could finally make way for him.
However, there are now moves afoot to curtail the Murdoch family's control over their firm.
A group of News Corp shareholders are suing News Corp executives, accusing them of nepotism for overpaying when they bought Shine Group, a British TV production firm, from Rupert Murdoch's daughter Elisabeth.
The American investors have expanded their lawsuit in light of the NoW scandal, to accuse News Corp's board of providing "no effective review or oversight" and permitting a "culture run amok".
According to stock analyst Alan Gould, many outside shareholders - who collectively own 62% of News Corp - would like to see more power transferred from the family to News Corp's president Chase Carey.
But unlike the ouster of Tony Hayward at BP, shareholders at News Corp do not traditionally have the final say.
"There is no precedent here," says media analyst Claire Enders. "Shareholders in the US have no clue what to do if Murdoch is seen as damaging the company."