According to Techcrunch and the rest of the Techmeme world:

"Scotland's Sunday Herald is running a story reporting that Google has secretly
reached deals with several large UK news groups to formally license content for Google News."

They go on to write

"The issue is not Google's alone. In theory any site that indexes and provides snippets of content from big media companies could easily face the same problem. Topix and Digg immediately come to mind, let alone the many smaller startups and personal sites that index news from the mainstream media."

Kevin Burton from Tailrank and Spin3r posts in the comments:

"You're wrong that Google News would face problems if they ran ads. These publishers needs Google News more than they need them.

Even if they DO run ads everyone wins. Google News only shows a small fraction of he article mandating a clickthrough . A rising tide lifts all boats.

We run a pretty deep crawl with Spinn3r (and have similar issues with ads running on Tailrank) and we've only had a few people ask to be removed.

Kevin"

Unless these deals are about expanding Google's rights beyond fair use (i.e. the right to use full content rather than just snippets), this is a dangerous move for the syndication and aggregation ecosystems who rely on fair use and opt-out mechanisms

As Duncan says on Techcrunch, this can affect all sorts of services everywhere and if Google makes these deals it could:

Set a precedent that could be destructive for innovation and fair use.

If Google makes moves to make the deals exclusive the implications could be even more significant.

This is an unsettling move that should be followed closely.