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Murdoch lieutenant Hinton quits Dow Jones

By Paul Thomasch and Yinka Adegoke

NEW YORK (Reuters) - Les Hinton, the top executive of Rupert Murdoch's Dow Jones & Co, resigned on Friday after becoming a target of criticism for the phone-hacking scandal that occurred when he oversaw News Corp's British newspapers.

Hinton stepped down as the British phone hacking scandal surrounding News Corp began to spread to the United States. He is the highest ranking executive yet to resign over a crisis that closed down the News of the World tabloid and scotched News Corp's $12 billion attempt to buy out BSkyB.

"I have watched with sorrow from New York as the News of the World story has unfolded," Hinton wrote in a memo to staff after resigning as chief executive of Dow Jones and publisher of The Wall Street Journal.

"That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp, and apologize to those hurt by the actions of the News of the World," he added.

At the Wall Street Journal, news of Hinton's departure was greeted by gasps and a stunned silence, despite much speculation in both London and New York that he could be toppled by transgressions that occurred on his watch.

Hinton's resignation came on the same day that another top Murdoch confidante, Rebekah Brooks, stepped down as chief of News International, which is responsible for all Murdoch's British papers. Brooks worked under Hinton when she was News of the World's editor and he ran News International.

News Corp is attempting to quiet the storm surrounding revelations of telephone hacking at News of the World. The resignations follow News Corp's decision to abandon a $12 billion plan to buy full control of pay TV operator BSkyB.

A person close to the company described Hinton as "the ultimate company man" who had come to the conclusion that someone had to take full responsibility for the hacking that occurred under his watch.

The decision was made over the past few days, following back-and-forth discussions with Murdoch, the person said, adding that the final say came down to Hinton.

"Les saw the hurt that was happening with the company and wanted to ameliorate the situation," the person said.

Hinton, 67, has worked alongside Murdoch for more than five decades, rising through the ranks until he was tapped to run News International in 1995, and later Dow Jones after News Corp bought the publisher of the Wall Street Journal.

On two occasions starting in 2007, Hinton addressed British parliamentary committees about the News of the World phone hacking, testifying both times that a full internal investigation had been carried out.

That testimony has resurfaced in press reports over recent days as new questions have been made about the depth of phone hacking at the tabloid -- including allegations that victims of notorious crimes, bombings and war may have been targeted.

There has been a lot of pressure on Murdoch to sell off his newspapers since the scandal broke, something he has resisted so far. Murdoch did, however, shut down News of the World on Sunday, and his sacrifice of Hinton and Brooks now was seen as a reflection of the depth of the crisis rocking News Corp.

"Les fell on his sword for Murdoch," said Jeff Jarvis, a journalism professor at City University of New York who had worked for Hinton when News Corp owned TV Guide.

"Murdoch isn't loyal to media assets but he's very loyal to those that are loyal to him," Jarvis added.

In a memo to Dow Jones' staff Murdoch said he accepted Hinton's resignation with the "heaviest of hearts," but the 80-year-old media power also attempted to deflect some of the wider criticism of the company.

"Let me emphasize one point - News Corporation is not Rupert Murdoch. It is the collective creativity and effort of many thousands of people around the world," he said.

In a memo to Wall Street Journal staff, editor Robert Thomson credited Hinton with transforming Dow Jones and avoiding hundreds of editorial layoffs when the company was "at the mercy of management consultants."

"In the most turbulent of times for 'old' media, Les steered us back into profitability and made us a digital force around the world," said Thomson.

News Corp is not seeking a replacement for Hinton at present, the person close to the company said.

Dow Jones President Todd Larsen, a former Booz Allen consultant, will report to News Corp Chief Operating Officer Chase Carey, the company said.

Reuters is a competitor of Dow Jones Newswires, the financial news agency that News Corp acquired along with the Wall Street Journal in 2007.

(Reporting by Paul Thomasch and Yinka Adegoke; editing Carol Bishopric)

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