News of the World losing ad contracts while News Corp stocks fall

Calcutta News.Net
Thursday 7th July, 2011

The hacking scandal that exploded in the British media this week has now begun to take its toll on News Corp. Stocks, with Rupert Murdoch finally speaking on the matter in an effort to contain the fallout.

News Corp. stocks dropped 4% during afternoon trading Wednesday, one of the few companies to lose ground on a generally buoyant market.

The fall was a result of investor uneasiness over the fallout from the scandal, which has incensed the British public and called into question the ethics of the nation’s media. In response to the public mood, major advertisers with the paper have pulled their contracts.

Renault, Vauxhall, Virgin Holidays, Halifax and the Co-operative Group joined Ford in cancelling all advertisements in News of the World, while consumer products maker Procter & Gamble, supermarket chain Tescos, as well as several other companies, including T-Mobile, have said they are reviewing their options.

The scandal revolves around alleged hacking of phones belonging to members of the public by News International’s flagship publication News of the World.

The British tabloid is accused of violating the privacy of a father whose 10-year-old daughter was murdered, the parents of a murdered 13-year-old girl, the family members of people killed in London’s 2005 terrorist attacks and the loved ones of British soldiers killed in Iraq and Afghanistan.

Media tycoon Rupert Murdoch, who has remained silent thus far, finally acknowledged the mushrooming scandal affecting his corporation Wednesday.

“Recent allegations of phone hacking and making payments to police with respect to the ‘News of the World’ are deplorable and unacceptable,” he said in a statement. “We are committed to addressing these issues fully and have taken a number of important steps to prevent them from happening again.”

Murdoch's statement, as well as statements from News of the World editor Colin Myler and former editor Rebekah Brooks have both now been published on News of the World's Web site.

They are the only three articles available on the site without a subscription and appear to be the paper's first attempts at redressing the enormous damage that has been done to its reputation.

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