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Rupert Murdoch’s discussions with rival John Malone about swapping his $9bn stake in satellite operator DirecTV, once the cornerstone of News Corp’s US media strategy, signal the dramatic reshaping of Mr Murdoch’s empire in light of the strong growth of the internet.

The talks are aimed at securing long-term control of News Corp by the Murdoch family, which owns around 30 per cent of the company’s voting shares.

Mr Malone’s Liberty Media has a 19 per cent voting stake in News Corp, now worth close to $11bn, which he secretly acquired when shares became available in 2004 during Mr Murdoch’s transfer of News Corp’s domicile from Australia to the US.

The response from a furious Mr Murdoch was the introduction of a poison pill – which has stopped Mr Malone from acquiring more shares but also means Mr Murdoch’s family cannot increase their stake.

Since then, the two media moguls, who have over the years acted as both allies and sparring partners over control of media assets, have had a number of negotiations aimed at swapping Mr Malone’s News Corp stake for one of the media group’s assets.

People familiar with the discussions said the current round of negotiations involving DirecTV were “real”.

A firm deal is not expected for at least several weeks, but people said there was a high chance the DirecTV talks could result in an agreement.

However, neither of the two media veterans are going to want the other man to come out a clear winner.

“News Corp, and Rupert Murdoch in particular, would prefer that Liberty and John Malone not control 19 per cent of News Corp voting power, but News Corp has been unwilling to execute [a deal] with Liberty that yields too much of the benefits to Liberty,” said Richard Greenfield, analyst at Pali Research.

For Mr Murdoch, considering shedding control of DirecTV is also the clearest sign yet of how much he thinks the media business has been changed by the widespread use of high-speed internet connections.

These allow for easy and instant communication as well as the viewing of high-quality video content online.

DirecTV was acquired in 2003 after years of lobbying and often bitter manoeuvring by Mr Murdoch to gain control over a significant distribution platform, one that has helped News Corp fuel the popularity of its television and cable content, such as Fox News Channel.

However, regulatory obstacles in the US mean it is not easy to adapt the one-way satellite technology to include broadband internet and telephone connections. Cable rivals are offering such bundles of products and are gaining ground over satellite rivals, which include Echostar and DirecTV.

In the UK, Mr Murdoch’s satellite group BskyB, run by his son James, is investing significant amounts to adapt, but the regulatory framework in the UK allows this.

Mr Murdoch has spent nearly $1.5bn on internet acquisitions, including $580m on buying social networking site MySpace.com, which has since become one of the most-viewed sites on the internet.

“Talking about selling an asset that he fought so hard to buy is a very significant step, and one that many executives would find hard to do,” said Aryeh Bourkoff, analyst at UBS.

“Mr Murdoch has bought a new media asset cheap and increased its value, and looks close to selling an old media asset at a good price.”

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