The New York Times was once described in worldly terms as "the kingdom and the power." But in recent decades the title applies more to the global empire of Rupert Murdoch, whose massive media octopus of $60 billion in assets spans Australia, China, Latin America, India, the United States, and Europe. In 2010, News Corp. earned $33 billion in revenue from Star TV in Hong Kong, Dow Jones in the US, and Sky TV and papers in London, to name a few. Mr. Murdoch's US-based Fox News network is described in a 2010 News Corp. report as "unstoppable."

Murdoch's clout is such that Tony Blair's first trip as British leader was to Australia for an audience with the mogul. If being feared is a requirement for British power, says Oxford writer Timothy Garton Ash, Murdoch has been more powerful than the previous three prime ministers.

What News Corp. potentates did not count on was Milly Dowler.

The 13-year-old British girl murdered in 2002 had her voice mail hacked and messages erased by Murdoch's media operatives within his British newspaper arm News International. After a July 5 Guardian exposé revealed that News of the World (NotW), one of Murdoch's bestselling British tabloids, tampered with Milly's cellphone messages (leaving her family thinking she was alive), she posthumously became Murdoch's Mohamed Bouazizi – the young Tunisian vegetable vendor whose self-immolation in December sparked the Arab Spring.

The scandal's penetration seems to have no end. It has smeared British Prime Minister David Cameron for hiring a key Murdoch editor (Andy Coulson, since fired); brought revelations of some 3,870 phone-hacking victims; damaged public trust with widespread evidence of police payoffs; caused a national inquiry into press, police, and politicians; and it has now leaped the Atlantic to an FBI inquiry into the possible tampering of the cellphone voice mails of 9/11 victims.

The scandal is seen as New Inter­na­tional's effort to find and sell stories on the tragedy of ordinary people. It's brought a British rejection of the Murdoch name for the first time since his partisan media became the engine for Margaret Thatcher's program to rejuvenate England in the 1980s. Since July 5, News Corp. has lost some $6 billion in value.

Turning away from tabloid taste

Whether Murdoch's empire will topple, as some breathless prognosticators say, is unclear. Certainly, damage is done. As Milly's story went viral, Murdoch closed NotW after 168 years, making it a sacrificial lamb for his larger aim to take over the lucrative British Sky Broadcasting (BSkyB) satellite TV firm. But after all sides in the House of Commons opposed the 71 percent buyout, Murdoch withdrew his bid. And on Friday, he saw his trusted London lieutenant, News International chief executive Rebekah Brooks, succumb to the mounting calls for her resignation.

Murdoch’s own behavior has done him no favors. He flew to London to take charge of the scandal but seemed uncharacteristically deaf to an angry public. While politicians made the Dowler home a pilgrimage, Murdoch's personal apology to the family on Friday appeared to come only at the last moment.

The extent of News Corp.'s criminality is the immediate question here. But the core of the story goes to a lowering of standards and what analysts call a cynical manipulation of emotions and tabloid taste hidden behind a facade of family values and British patriotism that have long defined the News Corp. approach.

News International broke the law "on an industrial scale," said former British Prime Minister Gordon Brown in the Commons, after revealing that his handicapped son's medical records were compromised. "In their behavior towards those without a voice .... [News International] descended from the gutter to the sewer."

In fact, News International is admired for the creativity and energy required to survive in the competitive London press hothouse. Yet it has long caused gritted teeth for adopting many creeds and attitudes of its boss, say journalists who have worked under News Corp. The Murdoch ethos of a do-whatever-it-takes-to-win attitude is prevalent. The 1990s NotW exposés on the royals and soccer stars seem tame compared with recent themes of shaming transvestites and pedophiles, unearthing medical horrors, and breaking into the voice mail of ordinary Brits.

"News of the World readers from even the 1970s, looking at recent front pages ... their jaws would be on the floor," says Nick Spencer of Theos, a London think tank on religion. "Even in the Victorian Era people liked reading the grotesque. But it was not daily fare on the front page of a national newspaper. It isn't so much human nature or morality ... but the unwritten rules of our public culture that are being violated by the tabloids."

Murdoch's long political reach

Significantly, the London media is a national media. Yes, London still runs on ink. Breakfast rooms, metros, clubs, and street corners are loaded with newsprint. But stories and broadcasts here echo through the British Isles with a singular power. "From the north of Scotland to rural England, it is a national readership," says Jon Silverman, professor of law and media at the University of Bedfordshire and a former BBC reporter. "That's why politicians have kowtowed. Here, if you have a conflict with Murdoch, you can lose millions of voters overnight."

The power of a central press is also one reason Mr. Coulson, the former NotW deputy editor hired by Mr. Cameron, is so significant. He was the right hand of Ms. Brooks when she edited NotW before climbing the ladder at News International. He is a "made" Murdoch man. His hiring was seen as embodying Murdoch's hold on British politics.

"Murdoch was a copartner with Thatcher. This wasn't independent media," says James Curran of the University of London media studies center. "Coulson was not just tainted by hacking. He is someone from the heart of a very partisan press, up to his elbows in unethical practices, who was brought in to act as a hinge between the Murdoch empire and the government. His job was to make sure that Murdoch was on board."

Comment on Coulson got wide airing from an unlikely source recently. British actor Hugh Grant secretly taped a former NotW reporter, Paul McMullan, who himself had once hacked into Mr. Grant's voice mail. Grant recorded as Mr. McMullan explained a book he is writing on the NotW that appears to finger Coulson in the early hacking period.

On the tape, McMullan says: "Yes, as I said to the parliamentary commission, Coulson knew all about it and regularly ordered it.... [Coulson] rose quickly to the top; he wanted to cover his tracks all the time. So he wouldn't just write a story about a celeb who'd done something. He'd want to make sure they could never sue, so he wanted us to hear the celeb like you on tape saying, 'Hello, darling, we had lovely sex last night.' So that's on tape – OK, we've got that and so we can publish."

On a recent night in London, outside the Red Lion pub off St. James's Square, many of the best and brightest stand around in pinstripes holding pints. A political consultant says that while the Murdoch scandal may be raging, he doubts it will last. "Murdoch is riding low," says the 40-something who did not want to be named. "But in eight months when no one remembers this anymore ... he will come out, a dangerous man, and inflict some payback. Bear in mind, Murdoch still holds half the police and half the politicians in his pocket."