News Corp.'s board unanimously approved a plan to split the media conglomerate in two pieces, separating its lucrative entertainment operations from its publishing business, said a person familiar with the situation. 
 
 The board made the decision after a meeting in New York Wednesday evening that lasted roughly an hour and a half, the person said. News Corp. Chairman and Chief Executive Rupert Murdoch spoke at the meeting and financial advisers made presentations to the board. The person said many details such as who will run the publishing business have yet to be resolved. The split is expected to be formally announced early Thursday morning. 
 
 The entire process is expected to take about a year, and the board must give final approval to the detailed plan. 
 
 One company will house entertainment businesses like 20th Century Fox, Fox broadcast network and Fox News Channel while another houses the publishing assets, which include The Wall Street Journal and the Times of London along with HarperCollins book publishing and News Corp.'s education business. 
 
 News Corp. shares have jumped 11% since Tuesday when the media company confirmed it was contemplating splitting in two, as investors applauded the idea of the company's less profitable newspaper assets being carved off. 
 
 Enlarge Image Close Getty Images Rupert Murdoch in April 
 
 Publishing generates much lower profit margins than the company's TV and film operations, and faces stiff competition from online news outlets. Industrywide newspaper advertising has fallen about 50% in the past five years, estimates the Newspaper Association of America. While the Journal has added subscribers, and has protected its content behind a paywall, the new standalone publishing company will confront deep challenges. 
 
 "Without deeper cost-cutting, given print advertising's continuing spiral downward, the new company's thin 7% profit margin would disappear quickly," wrote Ken Doctor, an analyst of the news industry at Outsell. 
 
 For the entertainment company, its overall profit margin will be higher without publishing. Its stock market valuation is expected to rise above that of News Corp.'s current valuation, analysts say, as the publishing assets are seen as a drag on the stock. 
 
 Moreover, without the taint of the phone-hacking scandal at News Corp.'s British newspapers, the entertainment company may have an easier time doing certain acquisitions, say people familiar with the situation. 
 
 That is important because the entertainment company could eventually have to confront the disruption posed by the Internet that has already affected newspapers. Film and television is already threatened by competition from online outlets, such as Netflix Inc. and Google Inc.'s YouTube. 
 
 In recent years profit growth at News Corp.'s entertainment businesses have been driven entirely by its cable channels, such as Fox News and FX. While entertainment profits grew 13% over the period from 2008 to 2011, all of that has come from the cable segment, whose operating income more than doubled between 2008 and 2011 to $2.76 billion. 
 
 The broadcast TV, satellite TV and film businesses each saw operating profit fall over the same period. With broadcast TV, operating profit fell almost in half in that period, from $1.1 billion in '08 to $681 million in 2011 (partly due to sales of some TV stations in 2008). The publishing businesses expected to be spun off saw operating profit fall 26% in that period, estimates Nomura Securities analyst Michael Nathanson. 
 
 News Corp.'s Moves Read about some of the media company's big moves over the years. View Graphics Calling It Splits Several companies have announced plans to split themselves apart in recent years. Read about some of them. View Graphics More photos and interactive graphics 
 
 Film, broadcast TV and satellite TV saw improvements in the first nine months of the current fiscal year, while publishing continued to decline. Mr. Nathanson expects the three divisions to finish this fiscal year with lower earnings than in 2008. 
 
 "I am perplexed about why so much value is created overnight in the entertainment company," says Todd Juenger of Sanford C. Bernstein. "A lot of investors are thinking they're spinning off the wonderful high growth assets into the entertainment company but…it will also include businesses that aren't high growth." 
 
 News Corp. declined to comment on valuation. 
 
 The film division is the second-largest entertainment business by revenue and profits, and it has enjoyed blockbuster hits including "Avatar" in recent years. But it also has been slammed by a plunge in DVD sales, a key source of profits in the film industry over the past decade. Consumers have increasingly turned to services such as Netflix and Redbox vending machines to rent DVDs rather than buy them. PricewaterhouseCoopers estimates global DVD and VHS revenues fell 19% between 2007 and 2011. It is expected to keep falling, only partly offset by rising streaming and other electronic rental revenue. 
 
 Broadcast television, including News Corp.'s Fox network and TV stations, was hit hard during the 2008-09 recession because it is heavily dependent on advertising. SNL Kagan says gross advertising revenue at U.S. broadcast networks fell to $17.2 billion in 2011 from a peak of $19.4 billion in 2006 and little growth is expected in coming years. Broadcasters have begun extracting payments from cable companies to transmit their channels but those fees remain relatively small, particularly relative at advertising revenue. 
 
 Fox's cable networks have been the standout, driven both by rising ad revenues and increases in subscription fees. Mr. Nathanson of Nomura Securities expects the cable networks to have annual revenue growth of 11.1% from 2011 to 2014 and even faster rises in operating income. 
 
 News Corp.'s revenues from cable and satellite operators could grow more slowly however if consumers start cutting the TV subscription cord in significant numbers, or if they choose cheaper TV packages without sports channels, says RBC Capital Markets analyst David Bank. He says that along with Walt Disney Co., majority owner of ESPN, News Corp. has the largest exposure of any media conglomerate to sports networks. He estimates News Corp. could lose $240 million of operating income annually if 5% of pay-TV customers switched to the cheapest-available package. 
 
 —Keach Hagey 
 
 contributed to this article. 
 
 Write to John Jannarone at john.jannarone@wsj.com ||||| Here’s Rupert Murdoch’s official “internal” announcement explaining the News Corp. split. 
 
 The important stuff: 
 
 Dear Colleagues: 
 
 It is with much enthusiasm and personal pride that I share with you today’s news regarding our plan to drive towards the next, transformative phase of this organization you and I have built together into one of the largest, most innovative media companies of our time. 
 
 That very size and breadth has created an opportunity to separate News Corporation into two global leaders in their own right — we will wow the world as two, as opposed to merely one. 
 
 I believe our leadership is born out of a spirit of innovation. We have never accepted the status quo. We have always been driven by the belief that we can do better — deliver a better product for our audiences and provide better performing businesses for our shareholders. Our success has come from our speed, flexibility and creativity in responding to changing markets, in combination with our commitment to serving our customers’ needs. 
 
 Our publishing businesses are greatly undervalued by the skeptics. Through this transformation we will unleash their real potential, and be able to better articulate the true value they hold for shareholders. Our aim is to create the most ambitious, well-capitalized and highly motivated publishing company in the world, consisting of the largest collection of our news and publishing brands, as well as our groundbreaking digital education group; we will also work to create the world’s top media and entertainment company, encompassing our premier broadcast and cable networks, leading film and television production studios and highly successful pay-tv businesses. 
 
 Much of our foundation already exists — because of you. We have the creative minds. We have the assets. We have the brands. But we must realign and reorganize in this moment of opportunity so that we can heighten our focus and be faster, more nimble, and more adaptable to change. When we began this journey 60 years ago in Adelaide, we made a commitment to provide great journalism, while also entertaining our consumers. In news, information, data, literature, and digital content, no company has devoted the resources, the passion, or enjoyed the success we have. That will not change. The most important guarantee to free societies, free markets and free minds is free speech. Knowledge has changed the course of history in every society, and we believe that being a creator and distributor of information is not just the right thing to do, it’s good business. The failure of other publishing companies to embrace the future has itself created opportunities for us around the world. Our publishing company will deliver on the promise of a well-informed society as we aggressively grow our business across borders and new global platforms. 
 
 On the media and entertainment side, we have a reputation for inspiring and entertaining millions of imaginations every day. We have a history of empowering truly visionary, creative talent to take chances that have redefined the landscape again and again. Today, our creative content businesses have never been stronger. Our distribution assets, globally, are on full throttle. These businesses, at the core of an independent media and entertainment entity, will innovate and grow even faster. 
 
 The most valuable commodities in the world today are information, analysis and education, with infinite potential through the growth of technology and digital platforms to accelerate the improvement of world living standards. 
 
 Today there are 30 million tablets in use in the U.S. and 75 million worldwide. In five years’ time, there will be at least 75 million tablets in the U.S. and 375 million in the world. Smartphones will get far smarter and grow rapidly over the next 5 years, from 120 million active phones to 225 million in the U.S., and from 835 million to 1.7 billion in the world. These technologies will permeate all parts of life — including education — and it is my firm belief that these two companies will be best positioned to compete in this rapidly evolving global economy and distribute our premium content on these platforms. 
 
 Over the years, I have become accustomed to the noise of critics and naysayers…and pretty thick-skinned! Remember what they said when we started the Fox Network, Sky, Fox News and The Sun? These experiences have made me more resilient. And they should you, as well. And time and time again, we persevered, creating new businesses, new products, telling new stories, informing and educating the public in new ways — and giving jobs to thousands more people. 
 
 I am extremely excited by this big change. It is a testimony to our entrepreneurial spirit and determination to educate, inspire and entertain millions of families across the globe. 
 
 I will personally be leading the creation of our new companies and will serve as Chairman of both organizations and as CEO of the media and entertainment company. Chase Carey will continue to partner with me on leading the media and entertainment business, by serving as President and COO. We are busy working on other important details and will inform you as they become available. 
 
 Lastly, each of you will make this possible. I will forever be grateful for your loyalty, hard work, creative thinking, and most of all, for your support in making this transition a successful one. We have much work to do as we grasp the great opportunities that lie ahead. 
 
 I cannot express how much I appreciate all of your hard work up to this point, and for the promise of your continued creativity as we lay the foundation stones for these two great companies. Each will be unified in their spirit, in their determination, and in their dedication to touching and enhancing lives around the world. 
 
 Best regards, 
 
 Rupert Murdoch
– News Corp is confirming that the media behemoth will split in two, allowing its more profitable entertainment properties to break free of its less profitable publishing ones, reports the Wall Street Journal—which itself is on the publishing half of that divide. "We will wow the world as two, as opposed to merely one," wrote Rupert Murdoch in an internal announcement obtained by AllThingsD. News Corp's board unanimously approved the split at a meeting last night. Murdoch will be CEO of both companies, while Chase Carey will be COO of the entertainment branch; industry watchers have their eye on Murdoch son Lachlan to head up the publishing arm. Investors are cheering the split; News Corp's stock has jumped 11% since Tuesday, as they salivated over the potential of a Fox unburdened by those pesky newspapers. "I am perplexed about why so much value is created overnight in the entertainment company," said one investor, arguing that the entertainment properties aren't all as high-growth as investors imagine. As for the publishing business, one analyst says that "given print advertising's continuing spiral downward, the new company's thin 7% profit margin would disappear quickly."