Whether Google News is good or bad for a newspaper's online business is also partly a function of how big the newspaper is. Google News seems to frequently promote the biggest sources (NY Times, Washington Post, Boston Globe, LA Times) with the main headline for a story and lump in the smaller players among the "2,000 plus sources". If you're a big player, it's probably fine to be part of Google News.<p>If you're a smaller player, maybe you needn't be covering stories that the big players are covering. Your readers are probably already only coming to you for local news anyway (part of the reason AP and Reuters content so often supplements a site). Reporting on more local stories could make you more likely to become the de facto source for your Local News section within Google News.<p>I've heard anecdotally that Yahoo's front door (which shows headlines from 3rd party sources) and Drudge are the biggest drivers of traffic to newspaper sites. Note that neither of those referrers tries to point out a dozen other sources for the story.