By Liana B. Baker

(Reuters) - CNN Worldwide President Jim Walton said on Friday he is leaving the once-dominant cable news network, which has struggled in the ratings race in recent years.

Phil Kent, chief executive of Turner Broadcasting, will begin a search for a new president, the network said. He is departing on December 31.

"CNN needs new thinking. That starts with a new leader who brings a different perspective, different experiences and a new plan," said Walton, 54, president since 2003.

CNN, founded in 1980 and now owned by Time Warner Inc, has tried to hold the middle ground in its news coverage, a position that some blame for its ratings erosion, while ratings have risen for competitors Fox News and MSNBC, which blend news with opinion and political commentary.

News Corp owns Fox, while MSNBC is now owned by cable giant Comcast Corp after its purchase of NBC two years ago.

The opinion programs on No. 1 cable news network Fox News skew conservative, while commentaries on MSNBC leans liberal.

From last September until the week ended July 22, CNN has trailed both networks, pulling in an average of 584,000 total viewers in primetime, compared with Fox's 1.82 million viewers and MSNBC's 726,000 viewers, according to Nielsen.

For the second quarter, CNN posted its weakest primetime ratings in 21 years, and total viewers fell 35 percent from a year earlier. It also received criticism in June for initially misreporting a Supreme Court health-care ruling.

One positive for CNN under Walton's stewardship has been its financial performance; the network is highly profitable. This year, CNN is on track to post record operating profit of $600 million.

"When Jim Walton assumed the presidency of CNN in 2003, it was underperforming and earnings were in serious decline," said Time Warner Chief Executive Jeff Bewkes in a statement. "Since then, he and CNN have tripled earnings, doubled margin and delivered annual growth of 15 percent."

Under Walton, CNN debuted shows such as "Anderson Cooper 360" and "The Situation Room with Wolf Blitzer," according to CNN's website.

Time Warner shares rose 57 cents, or 1.5 percent, at $38.94 on Friday. The company reports second-quarter earnings August 1.

(Reporting by Liana B. Baker in New York; Editing by Peter Lauria; Editing by Lisa Von Ahn)