General news is a niche market
If Google can’t make money off the news, who can? That’s the heart of a brilliant post by C.D. Nixon which says a bunch of things most journalists and many publishers can’t bear to admit. Nixon’s post features a picture of a Google search for “Afghanistan war.”
"Notice there aren’t any ads on the page. This is because ads for “afghanistan war” generate such low revenues per query that Google doesn’t think it’s worth hurting the user experience with a cluttered page. Google can afford to do this on news queries (along with many other categories of queries) because their real business is selling ads on queries where the user likely has purchasing intent. Big money-making categories include travel, consumer electronics and malpractice lawyers. News queries are loss leaders."
This isn’t new. Back before the internet any newspaper editor could have told you what sold and what didn’t. Things that didn’t: Foreign politics, local politics and national politics. There were exceptions to this. For the most part those exceptions were some form of scandal – sex or money, mostly – that would sell copies. Unless it was foreign politics. Then the only thing that would sell would be a war involving the US.
Despite this newspapers went right on covering these things. Why? Because they felt – not incorrectly – that this was the responsible thing to do. If they didn’t keep an eye on the scoundrels, who would? Their job was to tell the public what it should know, not just what it wanted to know.
They were able to do this for so long because they had an information monopoly. If you wanted information, you had to go to the paper and you had to get all of it. You couldn’t just get the sports or business or movies – which were usually what people were most interested in. So while papers would have told you that their news coverage was what people were most interested in, it just wasn’t true. News was a loss-leader even then – but it didn’t matter.
Here's another good view on the topic from Business Insider: Google's Insider View On Why Newspapers Are Screwed