Inside Murdoch's Decision

This week, Rupert Murdoch relented, agreeing to pursue a plan to divide up his empire, News Corp, a company he built from a single newspaper he inherited in Australia in the 1950s to a conglomerate with more than $33 billion in revenue and a market capitalization of $53 billion. But he still doesn't care about the so-called "Murdoch discount" that hovers over the company's share price. "I don't give a ---- about that," he said.

Instead, what helped change his mind was a perception that the entertainment and publishing businesses had become different enough that they needed separate management teams. While entertainment is surging, the publishing business faces challenges. In particular, with the inclusion of The Wall Street Journal, acquired in 2007 along with other Dow Jones & Co. assets, executives realized the publishing company had a global brand that could allow it to stand alone. Down the road, separating publishing could even allow him to acquire more newspapers, without facing the wrath of shareholders, according to a person familiar with his thinking. The change of heart was a long time coming.