Whether News Corporations announcement that it was withdrawing its bid to buy satellite giant BSkyB will give the company any respite from the indignation and official investigations is not clear. But it seems to have already altered not only the dynamics within one of the worlds most powerful and profitable media companies but also,possibly,the future of the newspaper business within the News Corporation. The decision to withdraw the bid was made as a contentious family drama played out. James Murdoch,a leading contender to replace his father as chairman and the driving force behind the bid,argued that the company should press for regulatory approval of the deal,sources said. But Rupert Murdoch and the News Corporations chief operating officer,Chase Carey,overruled the younger Murdoch,consulting him only after the decision was all but final. Rupert Murdoch is said to remain hopeful that the transaction is salvageable. One person involved in the discussions said the chairman saw the withdrawal as a way to mollify critics while waiting for the anger to fade. Rupert is thinking long term,I dont think he believes the deal is dead, he said. Hes just looking for ways to relieve pressure,to give some breathing room. He believes News Corp can bounce back. News Corporation also said it reserved the right to make another bid. The announcement is particularly fraught for James,who has been the principal champion of the BSkyB deal,pressing his father and the companys board to go along with it. But the scandal has pulled him in deeper by the day. Two proposals have been floated in the corporation to split off newspaper assets into a separate entity. This will allow News Corp to pursue ventures like BSkyB without having to answer for its journalists behaviour. Rupert Murdoch,80,is certain to resist this fiercely. His papers were the seedlings of his media enterprise,and his emotional attachment to them runs deep. However,James,38,is said to share none of his fathers romantic notions about newspapers. JEREMY W PETERS & JOHN F BURNS
