Let me first remind you that I do not think that children younger than 7 years old should watch news. Why 7 years old?
Well, simply because 7 years old is the age of reason. At 7 "plus or minus one," your child begins to problem-solve in a new way, using reason rather than pure intuition. He can start separating fantasy from reality.
First I should explain what the kind of news I am speaking about is. I am certainly not speaking about local news where you may see police chasing car, or report on all kind of crime happening in your city or what happen to stars...
I am speaking about real news; those which speak about international news, economy, politics, sciences, ecology... news that are not interrupted by commercials.
In fact news via the internet is certainly the best option to select the news your child can actually safely watch and learn from. TV can be windows on the world and not everything in the world is appropriate for his eyes.
So, let say that you do select some news from the internet that you find interesting like the oil spill disaster along the Gulf Coast for example, this disaster was worth showing and discussing about, it is raising your child awareness of ecology. Children are naturally feeling concerned by the well-being of the planet.
Children can also be interested by politics. They are naturally fascinated by their president and want to understand why all adult are looking at him as an important person. Plus they understand he has powers, and powers do fascinate children and not only in cartoon.
Children, who do not watch television programs and not much entertainment, may tend to be more receptive to news and factual programs. However, this is probably more a question of personality. Some children are naturally more attracted to fiction than fact and the other way too. Exactly like when choosing books in a library, some children will look for fact, sciences, geographic etc, and some will be more interested by fiction, novel, fantasy.
I would tend to think that with those who like fantasy better, it is even more important to preserve and encourage their interest for reality and their awareness for the world around them. The real world is also full of stories worth knowing and eventually watching. I am thinking for example of those people devote to a noble cause, like saving animal here or there on a planet. I know that both my children felt very concerned when they learned that some people around the globe where fishing too much, ignoring the future of the ocean, the fact that in 50 years we may not have any more fishes in the ocean if they do not stop to think short term. “So in 50 years, we will not have any more fish to eat…” This was very scary for them, and it is also a good lesson about the consequence of selfishness.
So yes, News can be used as a great tool to discover the world, discuss as a family about interesting subject and increase our children knowledge in a fun way.