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Did News Corp. Hack Into A Rival’s Computer?

Rupert Murdoch‘s got some problems, and not just those “demoralized” Journal staffers. Four separate lawsuits are brewing against News Corp. subsidiary News America, which specializes in newspaper coupon inserts and in-supermarket advertising. News America is one of the most profitable segments of News Corp.; its 28% operating margins are the highest in Murdoch’s empire and their operating profit is triple that of Dow Jones. But all’s not well.

Valassis Communications alleges News America forced their customers to sign long-term contracts for coupon inserts with News America or to suffer the consequence of massive (and illegal) price increases for their in-store advertising. They’re suing News America for $1.5 billion. Then there are the claims that News America CEO and News Corp. board member Paul Carlucci threatened to “destroy” rival Floorgraphics. There might be truth to that claim:


Robert Emmel, a former News America account manager, kept a copy of his work hard drive because he had some “concerns” about News America’s business practices. Of course, News America sued him when he went public and Emmel countersued. He’s charging that News America broke into Floorgraphic’s computer system 11 times in less than 90 days.

Best part of the article, about News Corp.’s Paul Carlucci:

As for Carlucci, a quick look at his background suggests a man with a soft spot for tough guys and how they operate. A board member of the Guardian Angels, he has invited founder Curtis Sliwa to speak at a company meeting for several years running. And according to the Valassis lawsuit, Carlucci once tried to motivate his sales force by playing a scene from the film The Untouchables in which Al Capone crushes a rival’s skull with a baseball bat. In Murdoch’s eyes, though, Carlucci is a star: In 2005 he gave him the added job of publisher of the Post, replacing Murdoch’s son Lachlan.

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