Google will not be buying a newspaper, though the search engine giant has considered it. That’s from Google CEO Eric Schmidt in an interview with the Financial Times. Google had also considered using its charitable arm to support news businesses seeking non-profit status.

There has been speculation that Google might even try to save such venerable news institutions as The New York Times, but Schmidt told FT.com Google nixed the idea in order to try “to avoid crossing the line” between technology and content. Google would instead be working with publishers to make their Web sites “work better” for online advertising.

The real subtext: newspapers are too expensive or carried excessive liabilities, Schmidt said, although he suggested that the idea might return to the table if there were “some massive, massive set of corporate bankruptcies.”

He also would not comment on speculation that Google was offered a 20 per cent stake in The New York Times held by Harbinger Capital Partners. Schmidt did say that he thought David Geffen, the DreamWorks co-founder also eyeing the paper, would be “an excellent owner”.

Schmidt also played down industry calls for Google to increase the amount of revenue it shared with news organizations whose content appears on Google News. Google was, however, working with the Washington Post and other newspapers to improve their online products.