According to Google…
Users can search for events, people or ideas and see how they have been described over time. In addition to searching for the most relevant articles for their query, users can get a historical overview of the results by browsing an automatically created timeline. We provide two ways of searching: search articles, which presents articles in order of relevance to the query; and show timeline, which presents a timeline of events and articles associated with the query. The timeline is dynamically generated in response to each query.
It does appear they have a few glitches to work out. According to this screenshot, most “Google” news happened between 1890 and 1960!
Via Steve Rubel.