The answer to this can be found in Chapter 15. Specifically, it can be found starting on p. 317 and ending on p. 319 of the paperback edition of the book. Throughout this book, Diamond says that geographical factors are the basic cause of most things that have happened in the long run of world history. It is geographical factors that he credits for allowing the New Guineans to escape being conquered by Europeans.
The first geographical factor that helped New Guineans was the presence of “malaria and other tropical diseases” in the New Guinea lowlands (317). This made it very hard for Europeans to get a foothold in New Guinea. Diamond says that Americans and Europeans have trouble living in New Guinea today, even with modern medicine. It was worse, of course, before modern medicine.
The second factor is the proximity of New Guinea to Indonesia. This proximity meant that many Indonesians came to New Guinea over the years and brought germs from Asia. Therefore, New Guineans had some immunity to Eurasian diseases.
The third factor was that European crops and livestock do not do well in New Guinea. Crops from the West have not grown well. Animals that are brought to New Guinea suffer from indigenous diseases and likewise do not do well. This meant that the Europeans could not really set up their own sorts of economies in New Guinea.
All of these geographic factors prevented Europeans from dominating New Guinea.