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The 5 Dumbest Things on Wall Street: July 8

3. More Nonsense At News Corp.

It's all fun and games at News Corp. (NWS - Get Report) until Rupert Murdoch loses an acquisition.

The media giant's chairman could see his campaign to purchase British Sky Broadcasting compromised in the wake of the phone hacking scandal at U.K. tabloid News of the World, which will be shut down on Sunday after publishing for nearly 170 years.

Murdoch was scrutinized not just in the British press this week, but in Parliament as well with Prime Minister David Cameron slamming News of the World for allegedly hacking into a murdered girl's voice mail back in 2002.

Private detective, Glenn Mulcaire, who was working for the paper, allegedly accessed Milly Dowler's phone messages after she was abducted. Mulcaire is said to have deleted some messages on Dowler's phone, complicating the police investigation. Dowler's killer was finally convicted last month.

This isn't the first time News of the World has been accused of privacy invasion either. The company has been sued by more than two dozen politicians, celebrities and athletes for allegedly listening in on their conversations and voice mails.

News Corp. has apologized and offered to settle some of those other cases, and the company says it's still investigating the Dowler matter. Some advertisers didn't wait around for the results of the investigation, however. Ford (F) jumped ship quickly, claiming it is "a company which cares about the standards of behavior of its own people and those it deals with externally."

Of course, the motor company had no problem with standards when it was showing its cars alongside the tabloid's topless Page 3 girls. Still, Ford's decision opened the door for other big ad buyers to bail on News Corp. rather than face growing public pressure to boycott the company.

And the pressure is rising. A new campaign, using the slogan "No time to give Murdoch more power," is petitioning the government to prevent the company from taking over the part of satellite broadcaster Sky that it does not yet own.

Last week, the U.K.'s Department of Media gave its blessing to the transaction after News Corp. agreed to spin off BSkyB's Sky News channel to ease competition concerns. Final government approval was expected to come by the end of the week, but recent developments in the hacking case may halt the buyout. Britain's media regulator said on Wednesday that it is assessing whether News Corp. is fit to hold a broadcasting license.

Then again, a postponement could be good news for Murdoch. After suffering massive write-downs following his Myspace and Dow Jones impulse purchases, any delay in this deal may help save Murdoch from his own worst enemy: himself.
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