Google does not show ads on the news.google.com page.
More likely, it was the loss of classified ad revenue to carsales.com.au and realestate.com.au
As to regional newspapers, why did the big corporations buy them up and then shut them down?
Perhaps removing competition, or they planned to shut them down all along, as it was cheaper to run them online from a central office... more profit!
This lens is telling: when it comes to media ownership consolidation, the big media companies argue that the internet provides enough competition that old cross media ownership restrictions are unnecessary because there is enough competition. However, when it comes to advertising revenue, they want protection from competition.
This was not about copyright... this was about protecting the revenue of the newspapers, who happen to be friends of the government.
If we want regional journalism, why not a government tax. Or better yet, have the government pay for regional journalism, like the government broadcaster here in Australia. No we cannot have subsidies for journalism.... that would unfair competition, not free market... Too left wing...
Instead, we have an effective tax on Google and Facebook to fund journalism.