Is a 38-year-old Harvard dropout ready to take charge of the world’s most global and powerful media company? After an impressive four-year stint as CEO of BSkyB, there are many who argue that James Murdoch does have the necessary smarts to succeed his father as CEO of News Corporation.

Rupert Murdoch, the world’s longest-serving public company CEO, clearly thinks so with James this week promoted to global deputy-chief operating officer based in New York.

You won’t read much serious analysis about this in the Murdoch press but the likes of Stephen Bartholomeusz in Business Spectator and Ken Auletta in The New Yorker have picked over the implications.

In a classic piece of Murdoch Kremlinology, News Corp didn’t even bother to tell the various stock exchanges around the world and the press release didn’t have a single quote from  Rupert Murdoch justifying this blatant nepotism.

With nepotistic regimes dropping like flies in the Middle East, it is clear that Rupert aspires to go against the trend. His reverential News Corp board is stacked with mates, children and boosters who seemingly have no objections, although things could change after Rupert dies.

All going well with James operationally, when would be the appropriate time for Rupert to “do a Frank Lowy” and step back to non-executive chairman? The Westfield annual report arrived this week and a beaming Lowy opened up with the following:

“This is my final review for Westfield as an executive. After 50 years in the leading executive role with the company, from May 2011 I will assume the position of non-executive chairman. I will, however, remain an active and involved chairman.”

My money is on Rupert doing exactly the same thing after he notches up 60 years as CEO of News Corp in early 2013. It would also be shortly after the next US presidential election. This gives James Murdoch two years to avoid the pitfalls that Lachlan Murdoch faced when he moved from Australia to New York in 2000, before bombing out in 2005.

James turns 40 on December 13, 2012, and that too will be an important psychological milestone for shareholders who are nervous about putting a boy in charge of the business.

The key mistake Lachlan made, apart from just not being nearly as good as his younger brother, was throwing his weight around too much based solely on his family name.

While James is said to be getting more arrogant and dictatorial as the years go by, he has worked hard to respect and preserve good relationships with the non-Murdoch old hands in various parts of the business.

For instance, Lachlan Murdoch fell out with the two men who have run News Ltd for most of the past 30 years, Ken Cowley and John Hartigan. James has little in common with either man, but gets on well with both.

Lachlan also carried too much baggage to New York from his two biggest Australian stuff-ups, One.Tel and Super League. He then took on two American heavyweights, Peter Chernin and Roger Ailes, and lost a bitter power struggle.

Chernin was a class act who always wanted to be CEO of News Corp and his departure in June 2009 made life a lot easier for those pushing a Murdoch succession.

He was succeeded as chief operating officer by Chase Carey who is perfectly happy as a loyal Murdoch lieutenant who enjoys nothing more than drinking beer and talking baseball with David Hill and the Fox Sports crew. James gets on well with Carey, who he will technically report to, and their relationship should not be a problem.

The bigger challenge will be the perennial argument about the trade-off between short-term profits and long-term brand damage from Fox News. Fox News boss Ailes is the world’s most effective right-wing propagandist who now leads the most profitable News Corp division.

Elisabeth Murdoch’s husband, Matthew Freud, was said to be speaking for all of Rupert’s adult children in January 2010 when he was quoted as follows in this fascinating New York Times profile of Ailes:

“I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes’s horrendous and sustained disregard of the journalistic standards that News Corporation, its founder and every other global media business aspires to.”

Rupert bristled when asked about this at the 2010 News Corp AGM, declaring that Freud “couldn’t be more wrong”. Have a listen here.

Guy Rundle recently pushed an interesting thesis in The Monthly when he argued that the farcical extremism of Fox News will potentially shore up Obama’s re-election, just like Newt Gingrich blocking supply helped Clinton secure a second term in 1994.

Rupert’s adult children are Democrats who like Obama, so what News Corp does in the lead up to the November 2012 presidential election will be a key pivot point in the James Murdoch ascension.