And what do you think those papers are worth without the readers?
It IS a consumer based business. The product that the papers deliver to their customers is the consumer, just as Google's customers are the advertisers and their product is the consumer.
Just like on the web, without the subscriber count and page views, the medium is worthless (from a revenue stand point). Something tells me Google gets it. Even (especially) their lawyers.
In fact, the only difference between Google and old News Corporations is who is providing the content. Before their myriad services and free "products" (I use that term in quotes because remember- the product is you, anything else they offer you is just a new medium to provide your eyes through, or to keep your eyes there longer) Google's only product (sans quotes) was your content. In essence, they were indexing our content, adding a few ads to it or the index it was in, and giving it back to us. There was no physical medium, no need to keep content fresh- we did that for them. Essentially, they were able to sell to their advertisers a medium that is always fresh. Essentially, they sold their advertisers the Internet (and they weren't the first to do so).
Along comes Adsense, where they opened up their advertising model to not only include ads on the search results, but also on the content itself. And we're more than happy to jump in to take our slice.
And then Gmail, where they can now sell the largest chunk of the Internet, the part most people use every day. And in a manner that is, as always, in context to ensure high conversion rates.
Google Docs? Google Calendar? All loss-leaders to keep current Gmail products (I'm not going to point out what's the product and what's the medium anymore) from defecting to other all-in-one solutions such as Office, or convert existing Office customers into Google products.
Is this practice evil or wrong? I don't think so. They're providing a service people want - for free - and a service advertisers want. They've found a way to transform themselves from a relatively obscure search engine into one of the largest ad brokers in the world, and all with relatively low overhead.
The newspapers really could stand to learn a thing or two from Google.