So there we have it. As print shrinks, Google will replace its daily functionality, its daily utility—and it’s been on that road for awhile—with Google News, v2. It sounds like Google News, v1 meets Google IG meets AdWords for news, a new algorithm that knows us better than we know ourselves. Importantly—distinguishing itself from all the My Yahoo (NSDQ: YHOO) products that have come before—Google is recognizing how fundamentally lazy we all are. Google seems to be saying: You don’t have to do anything, we’ll be your new paperboy.

Of course, this digital paperboy keeps all the money from the collections, a bizarro turn on the old value chain. News producers used to get the money and pay a few pennies (Newsies-like) to the distributors. Now the distributors are making the collections, and keeping it.

How well will Google’s new product work?

It will be an improvement over Google News, the wonder whose main properties are aggregation, immediacy and some rough hierarchy of importance, though it’s the last point that has made it vulnerable. Schmidt’s project is as much a defensive play, shoring up Google News against numerous others looking for ways to improve the news-finding experience (including AP with its landing-page plans), as an offensive one. Lost in much of the current Google/newspapers debate is that Google News is still out of the Top 10 in U.S. “Top News” (Nielsen) and needs to improve there compared to Yahoo, MSN network, AOL (NYSE: TWX) and others. (It’s Google overall dominance, News + Search + Paid Search, etc. that has made it the target.)

The two events of the day remind us how quickly the print to digital news acceleration is now happening. When we look back it, it will be simple to see:  Over the years, the ravages of Internet competition have damaged the press, causing it to cut back and back, and then the recession came long, just as a fierce storm whacks off the limbs of weakened trees, further diminishing them.

What are the causes for the sharper downturn in circulation? How about:

—Continued generational change to online preference for news over print.
—Continued decline of the print product. You can’t squeeze pages out and not expect to have an impact.
—Earlier deadlines. In moves to consolidate production and printing, we’ve seen earlier deadlines around the country. Earlier deadlines mean even less timeliness for print readers, though there’s no way print will ever beat digital on that. 
—The recession. With unemployment numbers where they are, and all of the above happening, it’s an easier decision to not renew these days.
—More publisher cutbacks. Yes, there’s been some truth to the publisher cutbacks of less-than-essential circulation, though that was supposed to have run its course.

Add it all up, and the future gets clearer. And it’s in pixels. The big questions get bigger. Who will pay journalists to create the news? Who will distribute it? How will a new, fairer, stable ecosystem emerge?