Rupert's 6-Step Makeover Plan

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Amid protests and a shareholder assault on Murdoch's family, a top analyst tells how News Corp. can get back on track.

Be Prepared to Minimize James

James Murdoch is a talented executive, as exemplified by his performance as BSkyB CEO. But the 67 percent of outside shareholders that on Oct. 21 voted against his inclusion on the board must not be ignored. Keep James on a short leash and be prepared to exile him if it is found that he deceived Parliament on phone hacking. (He's set to testify again Nov. 11.) If he remains on, he must be a willing apprentice to COO and likely future CEO Chase Carey.

Do the Right Thing for Victims

Paying $4.8 million to the family of murdered schoolgirl Milly Dowler, whose cell phone was hacked by News of the World, is a good first step. But there needs to be a coordinated effort to show -- rather than simply say -- that News Corp. is sorry about what happened. This plan should include making charitable contributions, backing privacy organizations and settling with more victims of unethical news gathering tactics.

Reinvent Fox News

Fox News has ratings but is a political hot potato, and advertisers often feel skittish about supporting its programs. Oust Roger Ailes and replace him with a family confidant like New York Post editor Col Allan or even James Murdoch. James' two years at Harvard and success with the Rawkus Records label suggest he can make Fox News informative and entertaining.

Become the Steve Jobs of Print Media

Having overpaid for Dow Jones, News Corp. should ignore calls to sell the newspapers and instead use them as platforms to create digital media that fully integrate video content. This could be Rupert's defining legacy: leveraging his old-media brands to create new business models, starting with efforts such as The Daily and WSJ Deutschland. Success in this arena also would help people forget about the MySpace debacle.

Buy Up News Corp. Stock

Show some confidence in the company by aggressively committing to stock repurchases, particularly since News Corp.'s own misbehavior has made stock buybacks attractive given the company's undervaluation. Recognize that there is no need to maintain a huge cash position for lingering aspirations of acquiring BSkyB -- regulatory approval of full ownership is a fantasy.

Listen to Karl (Marx, not Rove)

Rupert kept a bust of Karl Marx in his room in college. Marx was wrong about many things, but he was right in that a winner-takes-all economy unravels if the middle class lacks buying power. Murdoch, his U.K. and Australian newspapers and Fox News should be less conservative, more pragmatic and open to what will fix a flailing global economy.

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