According to the statement released by the Academy, Murphy is no longer hosting because of Brett Ratner’s exit as the show’s producer earlier this year. I understand the whole loyalty thing, but this does not seem like the best move for him, career-wise.

Here’s the statement from the Academy:

Beverly Hills, CA (November 9, 2011) – Academy of Motion Picture Arts and Sciences President Tom Sherak announced that Eddie Murphy has withdrawn as host of the 84th Academy Awards. “I appreciate how Eddie feels about losing his creative partner, Brett Ratner, and we all wish him well,” said Sherak.

Commented Murphy, “First and foremost I want to say that I completely understand and support each party’s decision with regard to a change of producers for this year’s Academy Awards ceremony. I was truly looking forward to being a part of the show that our production team and writers were just starting to develop, but I’m sure that the new production team and host will do an equally great job.”

Academy Awards for outstanding film achievements of 2011 will be presented on Sunday, February 26, 2012, at the Kodak Theatre at Hollywood & Highland Center®, and televised live by the ABC Television Network. The Oscar® presentation also will be televised live in more than 200 countries worldwide.

[source]