Vin Crosbie's done an analysis of Google news sources for a project, and generously shares the results on his blog. Vin says "Although Google spiders more than 4,500 news sources, only about dozen account for the vast majority of stories on Google News. And two of those dozen predominant sources are owned and operated by the U.S. and Chinese governments." He then runs the stats showing the breakdowns.
The comments on this post add to the discussion, with one poster writing "Google has a hierarchy of stories from a certain number of media outlets. That's the way most news services work. I think if you drilled down, you'd be surprised at how much content is actually repetition of the same AP stories anyway." and another saying 'What's interesting to me is that Google News manages not to be completely dominated by the power law, since half of the sources aren't in the top 20. "
As Vin would undoubtedly agree, it is hard to read this post and not think about Topix.net, which prides itself on indexing a wide variety of sources.