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Murdoch Digital Ambition for BSkyB Dashed by Tabloid Scandal

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Rupert Murdoch’s News Corp. spent two decades building the largest U.K. pay-television company. His efforts to leverage that into new digital businesses were dashed by a scandal at a 168-year-old tabloid.

News Corp. was forced to drop a 7.8 billion-pound ($12.6 billion) bid for full control of British Sky Broadcasting Plc yesterday after a phone-hacking scandal at the News of the World prompted Prime Minister David Cameron’s coalition government to side with the opposition Labour Party to block the deal.